Nigeria Joins OPEC To Cut Crude Oil Production

Worldwide oil producers, led by OPEC, are expected to cut production by roughly 20 million barrels per day (bpd), roughly equal to 20% of global daily supply, through a combination of mandated cuts, production falls due to poor economics, and purchases into oil reserves.

Opec producers and allies have agreed a record oil deal that will slash global output by about 10% after a slump in demand caused by coronavirus lockdowns.

The deal, agreed on Sunday via video conference, is the largest cut in oil production ever to have been agreed. Opec+, made up of oil producers and allies including Russia, announced plans for the deal on 9 April, but Mexico resisted the cuts.
Saudi Arabia and Russia, the two largest producers in this extended group, were unable to agree to curb output as the coronavirus pandemic worsened. Instead, they canceled the deal, and Saudi Arabia increased daily output to roughly 12 million bpd, boosting exports and lowering prices. That caused prices to fall as low as $23 per barrel for Brent crude LCOc1, the international benchmark.
The Federal Government on Friday said crude oil price would rebound by at least $ 15 per barrel in the short term following the latest intervention of the Organisation of Petroleum Exporting Countries and its allies, jointly referred to as OPEC + .
Minister of State for Petroleum Resource , Timipre Sylva , said the rebound could translate to additional revenue of $ 2 . 8 bn for Nigeria .
He said , “It is expected that this historic intervention when concluded will see crude oil prices rebound by at least $ 15 per barrel in the short term , thereby enhancing the prospect of exceeding Nigeria ’ s adjusted budget estimate that is currently rebased at $ 30 per barrel and crude oil production of 1 . 7 million barrels per day .
“ The price rebound may translate to additional revenues of not less than $ 2 . 8 bn for the federation. ”
Sylva , who disclosed this in a speech he personally signed, stated that Nigeria joined OPEC + to cut crude oil supply by up to 10 million barrels per day between May and June 2020 , eight million bpd between July and December 2020 , and six million bpd from January 2021 to April 2022 .
He stated that based on reference production of Nigeria in October 2018 of 1 . 829 million bpd of dry crude oil, Nigeria would now be producing 1 . 412 million bpd, 1 . 495 million bpd and 1 . 579 million bpd respectively