Nigerian Oil producers defy OPEC and are eager to pump more
15-02-2018 10:48
Independent Nigerian drillers want to supply more crude, in defiance of OPEC and Russia's pact to restrict output and boost prices.
Nigerian drillers are aiming to produce up to 250,000 barrels of crude a day by 2020 as part of a plan to boost the nation's output to 2.5m barrels a day. One of the biggest independent producers, Shoreline Group wants to increase its output by 50% by December.
Yet, Nigeria's membership of OPEC means it must adhere to the cartel's pact.
Warren Patterson, commodity strategist at ING Bank NV said, "If you get Nigeria exceeding the cap, then you're going to get others who pump a little bit more. The longer the deal goes on for, the more likely it's going to fall apart."
It's not only Nigeria looking to add production, Iraq is building infrastructure to increase capacity and Iran's oil minister has said the country can produce immediately.
Nigerian petroleum minister Ibe Kachikwu said that he was "not ruffled" by the recent oil price decline and the OPEC's instruction to cut production.
"OPEC needs to just focus on itself and focus on what it needs to do and forget what is happening in shale [...] Every OPEC producer must work hard to be a least-cost producer," he told Reuters.
Kachikwu said recently that Nigeria would explore selling its crude to African markets "Nigeria has to begin by looking at the country first. What do we do to encourage local companies to be able to compete in Africa? It is along these lines for example, that we have started product or sector specialisation which are the areas where we have the most competitive advantages."
