The Minister of State for Petroleum, Ibe Kachikwu, said Nigeria implemented its part of the OPEC production cut deal in February.
The resolution by the Organization of Petroleum Exporting Countries (OPEC) with its non-OPEC allies, to cut 1.2 million barrels per day was made on December 6 during the OPEC meeting.
The move which is intended to help prevent a supply glut to stabilise the market and strengthen crude oil price at the international oil market reduced Nigeria’s daily oil production by a minimum of 43,775 barrels.
“We’re basically complying, effective February” with the country’s pledged 53,000 barrel-a-day reduction, Mr Kachikwu said in an interview on Thursday.
“The price fluctuations mean OPEC needs to be a bit more together, a bit more determined to try to defend the market” Bloomberg quoted Mr Kachikwu as saying in the interview.
The 15-member OPEC agreed to cut a800,000 barrels per day (about 2.5 per cent) from October 2018 levels, while their seven-member non-OPEC counterparts settled for a cut of 400,000 barrels per day (about 2.0 per cent).
OPEC members are Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Congo, Saudi Arabia, United Arab Emirates and Venezuela.
While the deal has contributed to a jump in crude prices of more than 20 per cent so far this year, implementation has been uneven, with Saudi Arabia cutting deeper and faster than promised and other nations including Russia going slow.
Nigeria boosted crude production by 52,000 barrels a day to 1.8 million in January, according to third-party estimates compiled by OPEC’s secretariat. In February, the country was compliant with its agreed 1.7 million barrel-a-day limit, Mr Kachikwu said.
The drop is expected to remain in place for an initial six months period until June 2019 but is subject to a review in April according to a communique at the end of the 175th meeting of the 15-member oil group in Vienna, Austria in December.
The group will by this April discuss whether to continue the supply reductions in the second half.
The minister who had earlier established it will be very difficult for Nigeria to cut its current daily production capacity reconfirmed that Nigeria would have a hard time making deeper cuts.
“If more cuts need to come, there would be major challenges because between December and now we’ve had the Egina field come online,” Mr Kachikwu said.
The offshore field, operated by French energy giant Total SA, has not reached its maximum production level of about 200,000 barrels a day, but may do so in March, he said. Some of that output is a light oil called condensate, which isn’t counted in the OPEC+ deal, and some are crude, he added.
“The more we go outside the parameters of what we’ve agreed upon, the more we would struggle. We need all the money we can get for the country,” Mr Kachikwu said.