Too early for Nigeria, Libya to cut crude oil output —Barkindo
The Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), Dr Mohammed Sanusi Barkindo, has said it is too early to say when production caps should be imposed on Nigeria and Libya. Barkindo stated this at an economic forum in Russia’s St Petersburg, adding that the two countries “have a lot of issues to solve,” according to Reuters.
On low crude oil price, he assured that “We have no issues with people taking positions in the market; we are focusing on fundamentals.” He stated that Russian Prime Minister, Dmitry Medvedev, told him that the country was fully committed to complying with output cuts.
Meanwhile, Nigerian crude differentials were under pressure from the prospect of more plentiful supplies due to the return of Forcados exports.
Reuters quoted a trader as saying that about 15 June-loading cargoes were available, in addition to more July-loading barrels.
Qua Iboe was last heard to be offered at dated Brent plus $1.00, although one trader put the value closer to dated Brent plus 50-70 cents. The Forcados stream has loaded three cargoes in May, according to shipping schedules, after being shut down for months, adding to supplies.
The Forcados export terminal was shut down in February 2016 following militant attacks and Shell Petroleum Development Company of Nigeria declared a force majeure on exports of the grade. While the force majeure remained in place, the terminal was reopened in October but suffered another attack by militants.
When contacted, the spokesperson for the SPDC, Mr. Bamidele Odugbesan, said, “The force majeure on Forcados is still very much in place and any update will be duly communicated.”
Last week, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said test loadings had begun at the Forcados terminal, adding, “We still need to repair a lot of the secondary infrastructure that was damaged by militancy.”
He said the nation’s oil production was still hovering around 1.5million barrels per day, down from around 2.2 million b/d.
“But my projection is that within the six to nine months’ window, all things being equal, militancy remaining calm and the investment that is required is urgently done to repair the existing pipelines, we should get to the sort of figure that we had before,” he said.
In May, the Organisation of the Petroleum Exporting Countries and a number of non-OPEC producers met in Vienna to extend a deal to cut 1.8million b/d from the market until March 2018.
OPEC, in addition, discussed reducing output by a further 1 to 1.5 per cent, and could revisit the proposal should inventories remain high.