The Organisation of Petroleum Exporting Countries, OPEC, and non-OPEC member States, have withdrawn 2.1 billion barrels of excess oil from the volatile oil market, thus raising hope on market stability.
According to OPEC, which commended Nigeria for supporting its efforts, said the 2.1 billion barrels were slashed from the market between April 2020 and January 2021.
In a statement obtained by newsmen from OPEC at the end of its 26th Meeting of the Joint Ministerial Monitoring Committee (JMMC), which took place via video conference on Wednesday, 3rd February, 2021, under the Chairmanship of HRH Prince Abdul Aziz bin Salman, Saudi Arabia’s Minister of Energy, and Co-Chair HE Alexander Novak, Deputy Prime Minister of the Russian Federation, OPEC stated: “The Committee further noted that DoC participants pledged to achieve full conformity and make up for previous compensation short-falls, and stressed the importance of accelerating market re-balancing without delay. The progress of Nigeria in this respect was well noted.”
OPEC further noted that, “The Committee observed that in December 2020, stocks in Organisation for Economic Co-operation and Development, OECD countries had fallen for the fifth consecutive month. The Committee observed that, while economic prospects and oil demand would remain uncertain in the coming months, the gradual roll out of vaccines around the world is a positive factor for the rest of the year, boosting the global economy and oil demand.
“The committee reminded all participating countries to remain vigilant and flexible given the uncertain market conditions, and to stay on the course, which has hitherto reaped rewards. The Committee thanked the JTC and the OPEC Secretariat for their contributions to the meeting. The next meeting of the JMMC is scheduled for 3 March 2021.”
It also stated: “The Committee emphasized the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a re-balancing of the global oil market in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production, and the unanimous decisions taken at the 179th Meeting of the OPEC Conference and the 11th OPEC and non-OPEC Ministerial Meeting on 6 June 2020.
“The Committee noted, with gratitude, the significant additional voluntary supply adjustment made by Saudi Arabia, taking effect on 1 February 2021 for two months, exemplifying its leadership, and the need for a flexible and pre-emptive approach by all DoC members.
“The Committee reviewed the monthly report prepared by the Joint Technical Committee (JTC), including the crude oil production data for the month of December 2020. The Committee welcomed the positive performance of Participating Countries. Overall conformity with the original production adjustments was 101 per cent, reinforcing the trend of high compliance by Participating Countries.”
However, the Minister of State, Petroleum Resources, Nigeria, Chief Timipre Sylva, has been appointed the Special Envoy for further consultations with DoC Participating Countries.
It stated: “In line with the principles of fairness, transparency and equity that underpin the DoC, the JMMC has mandated the Minister of State for Petroleum Resources of Nigeria, HE Timipre Sylva, to undertake a mission as Special Envoy to the following Participating Countries: Congo, Equatorial Guinea, Gabon and South Sudan.
“The purpose of this mission is to hold consultations with the respective leaders of these countries on the DoC market re-balancing efforts. In particular, the Special Envoy will discuss matters pertaining to conformity levels with the voluntary production adjustments and explore how Participating Countries can collectively support and assist each other in achieving full conformity with their supply adjustments.”
It added: “Minister Sylva will also discuss with relevant authorities the compensation mechanism in accommodating underperformed volumes as agreed at the June ministerial meetings, and later amended in September 2020. Furthermore, this mission will solidify the dialogue channels between Participating Countries, and enhance transparency and information exchange. Given the geographic proximity of these countries, it is a rare opportunity for Ministers and leaders to safely meet in person, following months of virtual conferencing. Nigeria is the largest producing country in Africa and a key member of the DoC.