A historic deal was reached between OPEC and its alliance OPEC+ late on Easter Sunday breathing a sigh of relief to a deal that was thought to be dead at some point during the negotiations. Things changed later in the evening after the US agreed to cut a further 300,000 b/d on behalf of Mexico.
The deal now requires OPEC countries to cut about 9.7 mb/d while the United States, Brazil, and Canda will cut an additional 3.7mb/d. G20 countries will contribute to another 1.3mb/d in production cute. You can get the breakdown of the cuts by following this link.
As you may very well know, Nigeria will also be joining in these cuts. Earlier in the week, the Minister of Petroleum Chief Timipre Marlin Sylva had provided information on how much Nigeria will cut. However, that was based on the initial 10mb/d that was earlier mooted. With OPEC+ cuts now down to 9.7mb/d, the ministry of petroleum resources has now provided an update.
- May 1 – June 30th, 2020: Nigeria will cut 417,000 barrels per day. This translates to 1.412mb/d which we will now produce for export.
- July 1- December 2020: Nigeria will cut 334,000 barrels per day. This translates to 1.495mb/d which we will now produce for export.
- January 1, 2021 – April 2022: Nigeria will cut 250,000 barrels per day. This translates to 1.579mb/d which we will now produce for export.
- The baseline used for calculating was Nigeria’s October 2018 baseline production of 1.829mb/d.
- We also understand that Nigeria’s condensate production of between 360,000-460,000 b/d is exempted.