Nigeria said on Saturday it was ready to make additional oil output cuts from July to September to compensate for producing more than its quota in May and June, when OPEC and its allies implemented a deal to curb supply by record amounts.
“Nigeria reconfirms our commitment under the existing agreement,” Nigeria’s Ministry of Petroleum Resources said in a statement on Twitter ahead of talks between OPEC and its allies.
It said it also “subscribes to the concept of compensation by countries who are unable to attain full conformity (100 per cent) in May and June to accommodate it in July, August and September.”
It will recalled that the Organisation of Petroleum Exporting Countries (OPEC) was on 74 per cent as at May 29, with Nigeria and Iraq not living up to their commitment. Nigeria was less faithful, cutting just 19 per cent of its promise.
According to the survey data, Nigeria and Iraq did not live up to their commitments under the massive production cut deal that promised to take 9.7 million barrels of oil production per day out of the oversupplied market.
Overall, the survey showed the group cut just 5.91 million bpd from April levels, producing 24.77 million bpd. This is 4.48 million bpd of the promised reduction, or 74% compliant.
While some have suggested that the reason for OPEC’s failure to bring production down to promised levels is due to contractual obligations with buyers given the short timeframe between the date the agreement was made and its implementation, Iraq has a history of production quota noncompliance.
For May, Iraq reached just 38 per cent compliance with its promised cuts.
Nigeria was even less faithful to the quotas, cutting just 19 per cent of what it promised, according to the Reuters survey.
Despite the few members who failed to being production down as low as promised, OPEC’s overall May production was the lowest that it’s been since 2002, according to Reuters.
The sharp cuts in May, however, are watered down by the fact that several OPEC members, including Kuwait, the UAE, and Saudi Arabia, produced record-high volumes in April, which flooded the market while the world was beginning to see what was a massive drop off in demand.