The Organization of the Petroleum Exporting Countries (OPEC) has achieved a record 94 per cent compliance in the first month of an agreed production cut deal, its Secretary-General Mohammad Barkindo said in Abuja.
This came as oil prices edged higher on Monday as investors showed record confidence that prices would rise further. Global oil benchmark, Brent, was up 16 cents at $56.15 a barrel.
Barkindo, who is in Nigeria for an oil conference said after meeting with Minister of State for Petroleum Resources Ibe Kachikwu, that it was the first time the cartel will achieve over 90 per cent compliance on a deal.
13 member OPEC and 11 non-OPEC countries led by Russia agreed on 30th November 2016 to reduce their production by about 1.8 million barrels per day (bpd) for six months beginning from January (1.2 million b/d for OPEC and 600,000 for non-OPEC ) in an effort to limit oil supply glut that has crashed prices for over two years.
Barkindo said while member countries compliance level was over 90 per cent non-OPEC members still lagged behind.
“The numbers for the month of January that is the first month in the regime of six months has shown a very high level of conformity of about 90 to 94 per cent,” he said.
The OPEC scribe stated that the teething challenges from non-OPEC group was to be expected because it was the first time they were subjected to such a joint monitoring exercise.
The industry, he added, has witnessed one of its worst recession as nearly $1 trillion has been lost globally, “in terms of deferred projects, outright cancellation of projects across the supply chain-upstream, midstream and downstream.”
According to the OPEC scribe, all OPEC countries have lost cumulatively about $1 trillion in terms of national revenues since oil prices crashed in 2014.
On Nigeria, Libya and Iran’s exemption from the output cut deal, he said the exemptions will continue for six months.
“We look forward to the expiration of this production regime where we will sit down and look at the numbers again and move again.”
Kachikwu in his response commended the OPEC scribe for restoring credibility to the cartel.