Crude oil production freeze is now imminent for Nigeria as the country’s oil production increased by 138,300 barrels per day (bpd) from the 1.723 million (bpd in July to 1.861million bpd, according to the latest report from the Organisation of the Petroleum Exporting Countries (OPEC).
This has made the country to exceed its allocated crude oil production level by the Joint Organisation of OPEC-Non-OPEC Technical Committee (JTC), which would necessitate a cap in crude oil output.
The Joint Organisation of OPEC-Non-OPEC Technical Committee (JTC), had welcomed the flexibility of Nigeria in freezing crude oil output, which, despite its commitment to recover its pre-crisis production level, voluntarily agreed to implement similar OPEC production adjustments as soon as its recovery reaches a sustainable production volume of 1.8 mbpd.
According to the OPEC report, which was released on Wednesday, Nigeria’s crude oil production has consistently increased from the 1.511 million bpd in the first quarter of this year; 1.616 million bpd in the second quarter to 1.710 mpbd in June and 1.723mbpd in July.
However, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said that though Nigeria is recovering its oil production, the recovery is still not at the level it can tolerate a reduction in the 1.8 million barrels per day granted by OPEC.
OPEC explained that the total of its crude oil production averaged 32.76 mbpd in August, a decrease of 79,000 bpd over the previous month. It noted that crude oil output increased in Nigeria, while production showed declines in Libya, Gabon, Venezuela and Iraq.
OPEC added: “Booming refinery profits are helping West African oil producers to sell cargoes at higher prices, aided by a shortage in certain types of crude amid OPEC production adjustments and geopolitical turbulence.”
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