Why Nigeria won’t leave OPEC – minister

THE Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said that Nigeria would not leave the Organisation of the Petroleum Exporting Countries (OPEC) following Angola’s exit but would rather stay and challenge decisions that affect its membership.

Lokpobiri said this in an interview with Arise TV on the sidelines of the ongoing 54th Annual Meeting of the World Economic Forum in Davos, Switzerland, which started on Monday, January 15 and will end on Friday, January 19.

The forum brings together over 2800 leaders, including 60 heads of state and several chief executive officers, focusing on vital global issues like climate change, artificial intelligence, and geopolitical conflicts.

In December 2023, Angola announced its exit from the OPEC family, effective January 1, 2024, because the block no longer served its interests.

The Southern African country, which joined OPEC in 2007, produces about 1.1 million barrels per day (bpd), and its departure now leaves OPEC with 12 member countries.

Angola’s exit has raised questions about whether Nigeria, with a similar interest to Angola’s opposition to the reduction of its crude oil production quotas, will take the line and leave the block.

Lokpobiri said that although Nigeria had concerns similar to Angola’s, the country would address the issues in-house rather than leave the block.

“We will not leave, but we will continue to make our points. We are not satisfied with the quota given to us and are saying that we deserve more. We will continue to negotiate; we will continue to talk”, the minister said.

Noting that the last meeting where Angola objected and eventually left OPEC was a meeting of the OPEC+, a cartel headed by Russia, he said, “One way or the other, you must belong to OPEC or the other group (OPEC+).

“The other group has their concerns too. But everybody is more concerned with price stability, higher prices, not just the quantity that you produce. If you over-produce and the price goes down, you will not get adequate revenue,” he said.

Lokpobiri stressed that Nigeria would not allow itself to be short-changed but would play the polity within the OPEC family.

Hinting at Nigeria’s capacity to produce about two million bpd, the minister stated that the country was producing well above 1.4 million bpd of crude oil.

He said, “If you add the condensate of 350,000, we are already surpassing the figure budgeted in our budget (2024).”

He maintained that the country’s inability to produce two million bpd had nothing to do with capacity but the problems of insecurity and ageing infrastructure assets.

The ICIR reports Nigeria projected an oil production benchmark of 1.78 million bpd in its 2024 budget, above its cartel quota.

At a virtual meeting on November 30, 2023, OPEC+ reviewed Nigeria’s crude oil production quota up to 1.5 million bpd from 1.38 million bpd, subject to further consideration.






     

     

    Despite the misgiving surrounding the OPEC+’s quota, Nigeria has not been meeting its daily crude production target, with the Federal Government and its regulator, Nigerian National Petroleum Company Limited (NNPCL), blaming it on pipeline vandalism, militancy and other insecurity problems.

    An OPEC survey released on Wednesday, January 17, shows that Nigeria’s crude oil production rose to 1.41 million barrels per day in December from 1.31 million barrels per day in November 2023.

    The survey also indicated that oil production from the remaining 12 members of OPEC averaged 26.70 million bpd in December 2023, higher by 73,000 bpd month-on-month.

    However, an earlier report by The ICIR shows that crude oil revenue projected in the 2024 budget would suffer a setback as Nigeria will likely not meet its 1.78 million bpd oil benchmark.

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