By Dipo Olowookere
Nigeria has been excluded from the cut in oil production barrier put in place by the Organization of the Petroleum Exporting Countries (OPEC).
The body met on Wednesday in Vienna, Austria and it was agreed that production should be reduced by 1.2 million barrels a day to 32.5 million, effective from January 1, 2017.
This cut represents about 1 percent of global production.
For several months, OPEC had tried to convince its members to agree to an oil cut deal, but Iran, which only had its embargo recently lifted, vowed not to accept the deal heavily backed by Saudi Arabia.
OPEC came up with this idea following fall in the price of the commodity in the global market. It hopes that if supply drops, the price would go up.
Crude oil presently hovers around $47 to $50 per barrel. The current production is around 33.8 million barrels a day.
But at the 171 meeting of the Conference of the OPEC on Wednesday in Vienna, the body agreed to exempt Nigeria from the cut.
Saudi Arabia is expected to cut its production by 486,000 b/d; Algeria by 50,000 b/d; Angola by 87,000 b/d; Ecuador by 26,000 b/d; Gabon by 9,000 b/d; Iran by 90,000 b/d; Iraq by 210,000 b/d; Kuwait by 131,000 b/d; Qatar by 30,000 b/d; UAE by 139,000 b/d and Venezuela by 95,000 b/d.
“This agreement was reached following extensive consultations and understanding reached with key non-OPEC countries, including the Russian Federation that they contribute by a reduction of 600,000 barrels per day.
“The duration of this agreement is six months, extended for another six months to take account prevailing market conditions and prospects.
“We also agreed to establish a Ministerial Monitoring Committee composed of Algeria, Kuwait, Venezuela and two participating non-OPEC countries, chaired by Kuwait and assisted by the OPEC secretariat.
“They are expected to closely monitor the implementation of and compliance with this agreement and report to the conference,” Qatar’s Minister of Energy and Industry, Dr Mohammed Al-Sada, who doubles as the President of the OPEC conference, told newsmen at the end of the meeting.
At the next Ordinary meeting of OPEC in Vienna, Austria on May 25, 2017, the implementation of the deal would be reviewed.
Business Post recalls that talks about the oil cut by OPEC began in 2008.
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