The Nigerian Economy is likely going to pick up as a result of the landmark agreement reached Wednesday by the Organization of Petroleum Exporting Countries (OPEC) to effectively cut production by about 1.2 million barrels per day (bpd), or about 4.5 per cent of current production, to 32.5 million bpd.
OPEC member countries at the meeting agreed on a deal whereby special consideration was given to Iran, Libya and Nigeria so that in 2017, their production might actually increase, even as other members of the cartel begin to reduce output in the first quarter of next year.
Under the agreement whereby the three member countries are exempted from the production cutback, Nigeria was accommodated because of the reduction in production after some of its oil and gas facilities were damaged in attacks by militant groups in recent months
Dr Ibe Kachikwu, the Nigerian Minister of State for Petroleum Resources, said Thursday the development was good for the Nigerian economy. The negotiations in Vienna saw Nigeria getting an exemption from the OPEC production cut.
“The concession was given as the country has been through production challenges recently due to the vandalism of oil and gas infrastructure which had negatively affected the country’s ability to produce oil optimally in the recent past,” he said
“This deal will obviously enhance the prospects for the (Nigerian) oil and gas industry with the impacts already being felt as oil prices surged more than 8.0 per cent Wednesday afternoon in London, hitting a high of 51.84 US dollars a barrel.
“A stable increase in oil prices, which is one of the rewards that the deal will produce, will most likely contribute positively to the stimulation of the economies of OPEC member countries, including Nigeria, which are presently undergoing challenges.”
According to Kachikwu, the details of the deal saw Saudi Arabia agreeing to take on the highest burden of cuts amounting to 486,000 bpd.
He added that Iraq had been persuaded to reach a decision to reduce its output, as well as getting big non-OPEC producer Russia on board for a 300,000-bpd cut.
Source: NAM NEWS NETWORK