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The World's Most Expensive Oil Nears $100 Per Barrel

The World's Most Expensive Oil Nears $100 Per Barrel

Strong demand for heavy-sweet crude…

Are Oil Prices Still Too High?

Are Oil Prices Still Too High?

With global oil demand growth…

Nigeria Could Soon Start Cutting Oil Production

Egina Total

Nigeria could start reducing its crude oil production in line with the OPEC-wide output cut agreed last December, President Muhammadu Buhari said as quoted by Nigeria media, speaking to a special envoy of the Saudi king Salman.

The country was not this time exempted from the cuts: OPEC assigned it a production cut quota of 2.5 percent of the 1.7 million bpd the West African country was producing when the cut agreement was struck. This amounts to about 40,000 bpd, Energy Minister Emmanuel Ibe Kachikwu said at the time.

However, instead of reducing its production, Nigeria boosted it with the start of production at the giant Egina offshore field, operated by French Total. The French supermajor began production at Egina on December 29. Total noted that the plateau production at the ultra-deepwater field would be 200,000 barrels of oil per day, which would account for some 10 percent of Nigeria’s oil production at that future point.

Following a wave of militant violence in 2016 and early 2017 that crippled the country’s oil industry, Nigeria’s oil production started to recover in the latter half of 2017, when attacks on oil infrastructure subsided. According to the Nigerian National Petroleum Corporation (NNPC), the country’s oil production increased by 9 percent in 2018 compared to 2017.

Now, however, Saudi Arabia is showing determination to get everyone in line to boost prices, and is sending a special envoy to Nigeria, one of OPEC’s larger producers. Indeed, Buhari was quoted as saying he wished there was no need for Nigeria to reduce its production of crude oil and he’d rather the country could produce more.

He went on to add that “I have listened carefully to the message. I will speak with the Minister of State for Petroleum. I will call for the latest production figures. I know that it is in our interest to listen. We will cooperate.” The statement issued after the meeting also said higher oil prices would be beneficial for both Saudi Arabia and Nigeria: an argument that has been put to the test repeatedly and has not invariably passed this test.

By Irina Slav for Oilprice.com

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