OPEC
OPEC and non-OPEC ministers are about now meeting for informal consultations in Vienna in a last-ditch bid to agree the duration of oil output cuts. The ministers would also seek to clear a global stocks overhang that has pulled down the price of crude.
Top oil producer, Saudi Arabia, favours extending the output curbs by nine months rather than the initially planned six months, to speed up market rebalancing and prevent crude prices from sliding back below 50 dollars per barrel.
Iraq and Algeria as well as top non-OPEC producer Russia also supported a nine-month extension but some Gulf members, including Kuwait and the United Arab Emirates have pointed to a need for further analysis.
OPEC would meet formally in Vienna on Thursday to consider whether to prolong the deal reached in December in which it with the11 non-members agreed to cut output by about 1.8 million barrels per day in the first half of 2017.
A ministerial monitoring committee consisting of Kuwait, Venezuela, Algeria and non-OPEC Russia and Oman meets in the Austrian capital to discuss the progress of cuts and their impact on global oil supply.
Saudi Arabia, which holds the current OPEC presidency, will also attend.
Several OPEC delegates said they expected the meetings on Wednesday and Thursday to be relatively painless, resulting in an output cut extension by nine months.
“I think the meeting will go smoothly,” a delegate said, referring to signs of consensus in the group, including Iran, which has fought Saudi Arabia in many recent meetings.
However, several delegates and ministers said they did not believe cuts could be extended to a full year.
Meanwhile the Chief Executive Officer of Nigeria’s Oando says worst disruptions in oil-producing Delta region are over, and production could reach 2.2 million barrels per day (bpd) by the end of June.
Oando chief Pade Durotoye told the Africa Independents Forum on Wednesday in London that the long-closed Forcados oilfield could also be back to capacity by the end of June.
“We think that the worst is behind us,’’ Durotoye said. “Before the end of June, we will have Forcados back, which would take us comfortably back to 2.2 million bpd.’’
Attacks in the Niger Delta had pushed production to just over 1 million bpd at certain points last year, the lowest in decades, but attacks have abated since the start of the year.
The first Foracdos cargo from the main Trans-Forcados export line loaded last week, though operator Royal Dutch Shell has said force majeure remains in place.
Durotoye said “bold actions’’ by the government to address security in the area had helped, and that if it continued, Oando could boost output from 50,000 bpd to 150,000 bpd within18 months.
Durotoye said concerns over more violence had made investors to view the region with a lot of caution.
“Capital is still going to be constrained,’’ he said.
Durotoye also said Nigeria’s long-delayed Petroleum Industry Bill (PIB), which governs everything from the operations of state oil company NNPC to fiscal terms on oil exploration projects, was moving at a more assured pace.
“We expect approval sometime in the second half of the year,’’ Durotoye said.
Uncertainty over fiscal terms has held back upstream investment, especially in capital-intensive deepwater offshore.
Durotoye said that PIB approval would “put some (investor) concerns to bed.’’ (Reuters/NAN)
