OPEC records high level of output freeze compliance
The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC), reported that based on the Report of the Joint OPEC-Non-OPEC Technical Committee (JTC), for the month of March, OPEC and Non-OPEC countries have continued their high level of conformity with their voluntary adjustments in production.
The JMMC was established following OPEC’s 171st Ministerial Conference Decision of November 30, 2016, and the subsequent Declaration of Cooperation made at its meeting on December 10, last year; at which 11 non-OPEC oil producing countries cooperated with OPEC Member Countries in a concerted effort to accelerate the stabilisation of the global oil market through voluntary adjustments in combined production of around 1.8 million barrels per day.
OPEC said in a statement that the resulting declaration, which came into effect on January 1st, is for six months and is extendable for an additional six months, depending on the status of supply and demand, including global inventories.
The JMMC expressed its satisfaction with the progress made towards full conformity with the voluntary production adjustments and encouraged all participating countries to press on towards 100 per cent conformity.
As at March, the OPEC and participating non-OPEC countries achieved a conformity level of 98 per cent, an increase of four percentage points over the February performance. This demonstrates the significant willingness of all participating countries to continue their cooperation.
The next JMMC Meeting to be held in Vienna, Austria, on May 24, which will be followed by the Joint OPEC/non-OPEC Conference, during which the decision on extending the period of the production management will be taken.
Nigeria’s Minister of State for Petroleum Resources, Ibe Kachukwu, during the just concluded Offshore Technology Conference, OTC, in Houston Texas, admitted that U.S. shale is OPEC’s biggest problem as production can be cut or boosted in a short time in response to changing market conditions, unlike conventional oil projects.
Kachikwu added that Nigeria will continue to be exempted from any cuts while its output remains less than 1.8 million bpd, but it has plans to boost this to two to 2.5 million bpd within 12 months.
Kachikwu hinted that a policy initiative aimed at curbing shale output, or an agreement within the industry would help OPEC’s efforts.