With Nigeria’s oil output recovering to its highest level in more than a year, industry analysts have raised concern over the country’s exemption from the production cut deal reached by the Organisation of Petroleum Exporting Countries and other producers, The Punch reports.
Exports of crude oil are set to jump to over two million bpd in August, making it the longest loading programme in 18 months with the return of Forcados’ production. With output of crude now near its full capacity of 2.2 million bpd, Nigeria, which is exempted from the current OPEC cuts, could be asked to join the deal if the recovery continues. In May, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, acknowledged that Nigeria had a “responsibility” to join in the OPEC-led output cuts should its crude production return to 1.8 million bpd.
Some analysts said that one of OPEC’s mistakes when it granted exemption to Libya and Nigeria was that it failed to outline conditions for when the two countries would be brought back, which was “contributing to a credibility gap.” “The increase in output of both these countries has exceeded expectations among the vast majority. For OPEC not to devise a strategy for this has damaged market sentiment,” a geopolitical analyst at Energy Aspects, Richard Mallinson, said.