By Ishaya Ibrahim
Nigeria’s minister of state for petroleum and its representative at the Vienna meeting of Organisation of Petroleum Exporting Countries (OPEC) ministers, Ibe Kachikwu, has said that the majority of members are lining behind one million barrel-per-day addition to oil production.
OPEC ministers are divided along pro and anti United States line in the decision to either increase production output or maintain status quo.
The U.S. wants increased production which would eventually set oil price on downward slope, a major booster for its economy. Saudi Arabia is rallying support for this position because it has the capacity to absorb new production allocation and profit from it.
But Iran and Venezuela, currently under grueling U.S. sanctions and unable to absorb new production increase, are opposing it.
Although Nigeria is not opposing production increase, it also falls among the countries that can’t take advantage of whatever allocation that is added to it.
Meanwhile, any increase in production output would deplete oil revenue for countries that can’t make use of it. Oil price currently hovers around $74 per-barrel. Kachikwu told Bloomber T that it could slide to mid $60 if the increase is ratified.
But the one million barrel additions to the market would in reality be about 700,000 barrels because majority of the 24 oil producers lack the capacity to bear more load. It is expected that 80 percent of the new addition would be borne by Saudi Arabia and Russia whose oil industries are in advanced stage.
Kachikwu also revealed that Nigeria is currently producing 1.7 to 2 million barrels-per-day of crude oil, which is still far lower than the 2.3 million barrels-per-day it used in its 2018 budget.
On the state of Nigeria’s refineries, Kachikwu said they are not performing. He is however hopeful that negotiations with third party investor would have been completed in December this year.
He also said that the Dangote 650,000 barrels-per-day refinery, and two other modular refineries which would soon come on stream in the Niger Delta, would make Nigeria a net exporter of refined petroleum by 2020.
