Minister of State (Petroleum) Emmanuel Ibe Kachikwu told reporters on the sidelines of the meeting that “this production cut is expected to boost the price of crude oil in the market to around $60p/b in the next few days into the New Year when the cut is expected to take effect.”
Speaking at the end of the 171st conference in Vienna, Austria, Dr. Mohammed Bin Saleh Al-Sada, Qatar’s Minister of Energy and Industry and President of the OPEC Conference, said the duration of the agreed cut will be for an initial six months “extendable for another six months to take into account prevailing market conditions and prospects”.
He said the agreement was endorsed by member-countries “to be without prejudice to future agreements with the establishment of a ministerial monitoring committee composed of Algeria, Kuwait, Venezuela and two participating non-OOEC countries, chaired by Kuwait and assisted by the OPEC secretariat to closely monitor the implementation of and compliance with the agreement and report to the conference.”
Dr. Al-Sada said the agreement was “reached following extensive consultations and understanding reached with key non-OPEC countries, including Russia that they contribute by a reduction of 600 thousand (tb/d).”
Following Indonesia’s refusal to agree to the cut, the Asian country suspended its membership of the organisation. Nigeria and Libya were exempted from making cuts because of the peculiar economic and social challenges they were facing.
Saudi Arabia will take the biggest cut of 486tb/d.
Also, Algeria is expected to reduce its output per day by 50,000; Angola, 87,000; Ecuador, 26,000; Gabon, 9,000; Iran, 90,000; Iraq, 210,000; Kuwait, 131,000; Qatar, 30,000; UAE, 139,000 and Venezuela by 95,000.
Dr. Mohammed Bin Saleh Al-Sada said non-OPEC member Russia was committed to the agreement. It will cut production to about 300tb/d.
Kachikwu said vandalism of crude oil pipelines and militancy activities in the Niger-Delta was the reason Nigeria was exempted.
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