Barkindo: Too Early for Oil Output Caps on Libya, Nigeria

• Nigeria’s crude exports to China slides to nine-month low

Ejiofor Alike with agency report

The Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Mr. Mohammad Barkindo, has stated that it is too early to say when crude oil production caps could be imposed on Libya and Nigeria.

This is coming as China’s crude oil imports from Nigeria and other countries in the West African sub-region is expected to fall to just over 1 million barrels per day (bpd) in June, some 20 per cent below May’s level and their lowest since September 2016.

Speaking yesterday at the St. Petersburg International Economic Forum in Russia, Barkindo pointed out that both countries still had issues to resolve, stressing also that the cartel had no issues with people taking positions in the oil market.
Nigeria and Libya were exempted because their outputs had been curbed by conflict.

According to Barkindo, OPEC would continue to focus on the fundamentals of the oil market.

Barkindo told the sixth high-level of the OPEC-Russia Energy Dialogue that the continued joint efforts of the OPEC and participating non-OPEC nations, had proven to be effective and had led to signs of market rebalancing and a generally more positive mood in terms of market sentiment.

“And, now, with the last week’s decision of the OPEC and non-OPEC countries to continue their cooperative efforts, we have seen further momentum in the right direction, indicating a steady re-balancing of the market. We all know the benefits this will bring to stakeholders across the industry: a stable and growing oil market, a healthy, robust and expanding world economy and security of oil supply to future generations. This is something worth fighting for,” Barkindo said.

Barkindo met with Prime Minister of the Russian Federation, Dmitry Medvedev, where the Russian leader emphasised the importance of the advancement of the energy dialogue with OPEC in recent years.

“The good relations between OPEC and Russia have helped the oil market to recover. Our coordinated efforts have resulted in a better economic situation for all,” Medvedev said.

Barkindo noted that there were clear signs that the market rebalancing was taking place, adding that: “Without the high authority and strong support of the Russian Federation, we could not have reached the consensus needed to sign the Declaration of Cooperation.”

In a related development, China’s West African crude oil loadings are on track to slide to a nine-month low in June as buying in the key outlet wanes after months of voracious, Reuters has reported.
Competition to supply China is also fierce, with top producers Russia and Saudi Arabia fighting for market share in the world’s number two oil consumer as Iran also stepping up supply.

West Africa’s total loadings for Asia are expected to slip to 1.995 million bpd, down from 2.084 million bpd in May, but above the June 2016 level of 1.647 million bpd.
However, Indonesia, a South East Asia emerging economy, has indicated interest to purchase more crude oil from Nigeria.

Indonesian Ambassador to Nigeria, Mr. Harry Purwanto, who stated this in Abuja when he paid a courtesy visit to the Group Managing Director of NNPC, Dr. Maikanti Baru, explained that his country’s President, Joko Widodo, had instructed Indonesia National Oil Company, Pertamina, to direct its attention to Nigeria in its quest to meet his country’s surging energy needs.

According to a statement by the NNPC, the call by the ambassador signifies the prospects of soaring Nigeria’s market share in Asian emerging economies, including China and India, having lost grounds in crude oil sales in the US due to advances in shale oil exploration in recent years.