Nigeria, two others get special concessions as OPEC agrees to cut oil output

Photo credit: Bloomberg
Photo credit: Bloomberg

Nigeria, Iran and Libya got special concessions Wednesday, as the Organisation of Petroleum Exporting Countries, OPEC, reached the much-sought consensus to cut oil production by 1.2 million barrels per day, effective January 1, 2017.

The cut, which is the first after eight previous attempts since 2008, is considered a massive boost to efforts by the global oil cartel to shore up oil prices and end a record glut that has paralyzed economies.

It is also seen as a major achievement by OPEC’s Secretary General, Nigeria’s Mohammad Barkindo, whose diplomatic shuttles since assumption of office in August, led to the “Algiers Accord” that sought to stabilize the market and boost price.

OPEC President, Mohammed Al-Sada, who announced the resolution on Wednesday at the end of the body’s 171st meeting in Vienna, Austria, said the adjustment in output would be shared among all members of the group, to bring their ceiling to 52.5 million barrels per day.

The cut is subject to a review after six months, with a possible rollover for another six months on the recommendation of a ministerial monitoring committee of three OPEC counties, namely Kuwait, Venezuela and Algeria. The countries are to closely monitor the implementation and compliance with the agreement.

Mr. Al-Sada, who is also Qatar’s Minister of Energy and Industry, said the latest output cut was subject to another 600,000 barrels expected to be cut by non-OPEC oil producers who have agreed to support the effort to re-balance the market and restore stability.

The OPEC president said the Russian Federation has agreed to take responsibility for about 300,000 barrels per day out of the non-OPEC volume, with final decision expected during a December 9 meeting in Dorha.

The 1.2 million BPD cut followed an agreement by members to implement a deal proposed during the last September meeting in Algiers to reduce crude oil production by at least one million barrels by November.

During the September resolution, three countries, namely Nigeria, Iran and Libya were proposed as candidates for exemptions in consideration of their peculiar circumstances.

Nigeria was recommended for exemption to enable it recover from the negative impact of incessant attacks on its oil facilities by armed militant groups in the Niger Delta region, which resulted in a massive cut in its production and exports capacities.

Libya was equally proposed for special consideration on similar grounds, following series of attacks on its oil facilities by terrorists groups operating in that region in recent months.

But, Iran was to be excluded to allow the country settle down and recover, after serving years of U.S.-imposed sanctions, including restrictions on its oil production and exports.

Although details of each country’s output adjustments were yet to be released by the OPEC secretariat, Mr. Al-Sada said Saudi Arabia, the group’s biggest producer, agreed to the biggest slice of about 486,000 BPD.

At the opening session, OPEC President, Mohammed Al-Sada, said the current situation in the global oil market required urgency in “bringing forward the re-balancing of the fundamentals and returning sustainable stability to the market.”

He said members considered all factors and processes in arriving at the decision, which he said would ultimately help revive the industry and boost reinvestment efforts to raise oil production capacity to secure the mid to long term security of supply

“We knew re-balancing the market will need courageous decisions from OPEC, with the support of some key non-OPEC countries. We agreed to share the reduction among OPEC countries, taking into consideration that some countries needed to be given special considerations because of their peculiar circumstances,” he explained.

The monitoring committee is expected to submit a report to the next meeting of the group scheduled for May 25, 2017.

“This a major step forward to re-balance the market and reduce the stock overhang, will be fair to both consumers and suppliers and ensure that the economy is moved to a healthier level of inflation and growth,” Mr. Al-Sada said.


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  • Elder Ayo. T.Onikoyi

    DEAR EDITOR,

    I want to expose the useless government of President Muhamadu Buhari. It is the worst government
    Nigeria has ever had. Do you all know that there is nationwide blackout in Nigeria? This is the 21st
    nationwide power failure in Nigeria since Muhamadu Buhari became president on 29th May, 2015.
    President Buhari does not have schooling or education to be president of a village or of farmers,
    not to talk of a country. Hypocrites like General Obasanjo and Alhaji Bola Tinubu who supported
    Muhamadu Buhari as APC candidate for president do NOT mean well for Nigeria.

    From now on,
    all Nigerians must ignore and hiss at both General Obasanjo and Bola Tinubu as useless men.
    Nigerians are killing themselves with suicide out of economic and financial frustration today.
    Everyday Nigerians are jumping into lagoons are hanging to death inside their bedroom.
    Inflation has doubled the price of food items and increased cost of medicine by 300%.
    Retrenchment is nearly reaching 5.4million people under a useless President Buhari.
    How can any honest person cope with that on fixed salary owed unpaid for 6 months?

    • Short & Sharp

      FOR BRINGING ABOUT TOTAL POWER FAILURE AND NATIONAL DARKNESS 21 TIMES,

      FASHOLA IS NOT JUST INCOMPETENT, RAJI FASHOLA IS A CRIME AGAINST HUMANITY

    • questio

      Elder A.T. Onikoyi:

      Yepa!
      Nigeria don finish. Power failure nationwide for 21 times in 18 months under
      BUHARI? What next? What are you guys still waiting for before you troop to
      Ojota park for massive riot? The then president Goodluck Jonathan was not this
      evil before you went to Ojota at that time. So, why are you not protesting this
      time around? You are thinking that President Buhari can favour you with
      appointment next year, no be so? You prefer to have appointment to steal money even
      if your country goes to hell, right? You people in that country are not
      serious! There is nothing like nationwide darkness from electricity failure in
      Togo. Nothing like that. Togo has no petrol, no gas, nothing, but they can supply electricity.

    • G-string

      ……….If Femi Falana has died….why did Premium Times not report the news here…..what is there?…….
      ……..Premium Times cannot be hiding news…..good journalists must expose news….not hide it………..
      ….I can bet my last kobo that Femi Falana has died long time ago….but Premium Times is hiding the news….
      How can there be total darkness for 21 times in Nigeria…..and Femi Falana is okay with that….it is not possible…
      ………….If Premium Times is too shy to say it we can still pray that may his gentle soul rest in perfect peace……..
      I will not be surprised if Pastor Tunde Bakare is dead too…..he can’t be alive and allow total blackout 21 times…..
      …Premium Times must wake up and tell us who is still alive so that we can know why Nigeria is in darkness…….
      Nigeria is dying a painful death under President Buhari…and there’s no riot……ha, too many people have died….

      • t_akins

        STOP SPREADING RUMOUR. FEMI FALANA IS NOT DEAD. I SAW HIM
        YESTERDAY AROUND 2.00PM IN FRONT OF HIS HOUSE. HE TIED WRAPPER WITH BUHARI
        PICTURE AND BOLA TINUBU pictures ON IT and HE HAD A LONG BROOM IN HIS RIGHT
        HAND HE WAS WAVING TOO, BUT I DON’T KNOW WHY.

  • Otile

    Accused be the day many treacherous Yorubas put Mohamed Buhari in power. God bless the good Yorubas and other people who used good commonse and avoided voting for him. May those who are still pretentiously supporting him perish in this recession. All say amen.

    • Public Record

      “Yet while some progress has been made fighting terrorism and
      corruption, Buhari’s rigid leadership style has made the country’s economic
      problems harder to solve. Africa and the world cannot afford a failing economy
      in the continent’s most populous nation. Yet that is exactly what Nigeria might
      be getting: Its economy is on track to shrink by 1.7 percent this year, the official
      unemployment rate has more than doubled over the last two years, and,
      inflation is at an 11-year high.”

      ……………..BLOOMBERG

      (November 28, 2016)

  • Mamapikin

    As for Nigeria, no wahala. Dem know say Niger Delta criminals go help them reduce the country quota

    • Adesanmi Olukayode

      @Mamapikin:disqus

      My brother. Even if crude oil sells for $500 per barrel Nigeria will remain like this – no water, no light, no job.
      Muhamadu Buhari is clueless. He doesn’t know his right hand from his left hand. Oil price can’t help him.
      He is more or less an illiterate. His Ministers are nothing to write home about. The one in charge of light,
      Raji Fashola does not think at all because he cannot think. Throughout eight years in Lagos Fashola
      showed complete ignorance of governance. He diverted public funds to tarring existing roads at 400%
      of the actual cost and he and his Muslim brothers made away with the difference. The result is mass
      illiteracy in Lagos state today. Public schools in Lagos state post between 80-90% FAILURE RATE
      in Waec exams. In short, Raji Fashola created the horrors of bloodshed now flowing in Lagos today.
      Rather than scream havoc assorted griots like Tunde Fagbenle and Wole Soyinka sang praises.

      • soloohf

        Tell me how much do yu expect from expect from an innocent honest man in a sea of criminals and crooks …people like you who are beneficiaries of corruption and criminality under gej and the pigs ?????you never see anything good in trying to sanitize the system that have been bastardized for over sixteen years by crooks and their surrogate….you can wail and but smart Nigerians knows what going on pigs and corruption is fighting back using e..rats like you…

        • Tommy

          Which sea of criminals, u mean the one it took six month to appoint by ur innocent honest man, who now racketeer our jobs (FIRS, CBN etc) and get dollars at #190-$1 at CBN or d ones that r no more in govt? I don’t just understand u on that….

          secondly, what system is ur innocent and honest man sanitizing whereby those PDPigs who stole during those 16 years as u mentioned are now saints because they’ve crossed over to ur innocent man party… or rather, so far how many have been convicted in this yeye corruption war or d so called acclaimed recovered money, where r they…

          my dear brother, stop deceiving yourself

      • Mamapikin

        you are on your own.