New Telegraph

Anxiety as Nigeria eyes 0PEC’s 1.61mb/d

The question of Nigeria being able to meet or exceed the production quota of 1.61 million barrels per day allocated by the Organisation of Petroleum Exporting Countries (OPEC), in view of the plethora of OPEC building problems bedevilling the sector, has continued to re-echo. AKINOLA AJIBADE reports

 

Recently, the Organisation of Petroleum Exporting Countries (OPEC) rolled out some plans, with a view to returning the market to stability. Part of the plans include restoring supplies of crude oil in international market, a development, which was halted during the pandemics that brought virtually all the major world economies to their knees.

 

The global oil industry regulator issues production quotas to member states, relative to their capacity to explore, produce and export crude oil to buyers. These measures, among others, were taken by OPEC in order to control the supply and demand for the product and further improve prices.

 

Through this means, OPEC is proving to the whole world that it has the magic wand to turn around situations in the market, by bringing back prices to what it was in 2008, when the global crises started and prices of crude oil fell to as low as $32 per barrel from over $120 per barrel within five months, precisely between July and December, 2008.

 

Besides, the global oil body, by its actions in recent times, appears to be assuring member states directly or indirectly that the siege in the global oil market would soon be over.

 

They include Nigeria, Algeria, Congo, Equitoral Guinea, Libya, Angola, and Saudi Arabia. Others are Iraq, Iran, Kuwait, Saudi Arabia, United Arab Emirates, Gabon and Venezuela. Prior to this, OPEC had, at its 21st ministerial meeting early October this year, re-emphasised the need to add 0.4 million mb/d to the global output.

 

It had earlier deliberated on the issue of increasing output by 400,000 b/d, at a meeting  with members and non-members alike, at a crucial meeting initiated to move the market forward, in Vienna.

 

The issue of adding 400,000 b/d has begun and would continue till 2022. Not ready to leave anything to chance, OPEC members, including Nigeria, anxiously desire to meet the production quotas. Nigeria, Africa’s top exporter of crude oil, has started making efforts to meet the quotas in relation to her 1.6 million barrels of crude oil per day, placed on her lap buoyed by the success that it has produced between 1.8mb/d to two mb/d in the past.

 

This is coupled with the fact that Nigeria’s foreign reserves was recently increased to $39 billion from $37 billion, a measure attributed to the rise in crude oil prices.

 

Though the country is taking a bold step to increase her production of crude oil, at least, to garner more funds for the economy, since it largely depends on crude exportation for growth, the issue is not without problems in the sector.

 

Challenges

Over the past few years, Nigeria has been beset by a multitude of problems, notably decreased crude production and exports, oil theft and pipeline attacks, stalled economic reforms and recovery and the threats of oil volatility. Others are technical faults, arising from shuttling down oil reservours and insurgency, caused by the activities of Boko Haram and other groups.

 

Coupled with this are attacks on farmlands by herders and kidnappers. Speaking on the issue, an energy expert and a former Head of British Facility for Oil Sector Transparency and Reforms ( FOSTER), Mr Henry Adigun, said that there were challenges in restarting an operation once it is shutdown in the sector. He said it was pretty more difficult to restart an operation, when

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