In this list

OPEC urges Libya, Nigeria to join oil output cuts

Energy | Oil

Platts Global Alert - Oil

Agriculture | Biofuels | Vegetable Oils | Energy Transition | Carbon | Emissions

Trash to Treasure: the role of UCO and POME in energy transition

Oil | Energy Transition | Energy

APPEC 2024

Oil & Gas | Crude Oil

Asian refiners shrug off OPEC+ cut as Middle East suppliers respect Far East contracts

Energy | Oil | Crude Oil

Dated Brent Price Assessment

Oil & Gas | Shipping | Coal | Metals | Electric Power | Energy Transition | Refined Products | Bunker Fuel | Fuel Oil | Marine Fuel | Metallurgical Coal | Steel | Ferrous | Nuclear | Renewables | Crude Oil

Commodity Tracker: 5 charts to watch this week

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

OPEC urges Libya, Nigeria to join oil output cuts


Both countries still want exemptions from quotas

Output recoveries may weaken their cases

Delegates say it's time they help rebalance the market

  • Author
  • Staff
  • Editor
  • Jonathan Dart
  • Commodity
  • Oil
  • Topic
  • Oil Price War

Vienna — Libya and Nigeria could be key elements in an OPEC output agreement this week as other members are pushing to rescind the two countries' exemptions from production cuts and have them join the rest of the organization's efforts to ward off a supply glut.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Neither country seems keen to do so, citing their continued security risks, but having boosted their crude output significantly over the last two years, their pleas may be falling on deaf ears. Delegates told S&P Global Platts that they will be asking Libya and Nigeria to accept a production cut quota if OPEC can reach a new supply accord when it meets Thursday in Vienna.

"We are hopeful that they will come around this time and understand that everyone has to cut together," an OPEC delegate said, asking not to be named because of the sensitivity of the discussions.

The delegate added that both countries had made significant improvements to their production since the current deal went into force in January 2017, and it was time for them to "contribute."

Libya and Nigeria, both suffering from internal disruptions, were not given quotas when OPEC and 10 non-OPEC allies instituted 1.8 million b/d in cuts that are set to expire at year-end.

Production from Libya has surged 520,000 b/d, or more than double, from the October 2016 baseline on which the cuts were based, while Nigerian output has risen 210,000 b/d, or 13%, according to S&P Global Platts OPEC survey data, though both have had volatile swings.

"Both countries remain hotspots of uncertainty and are by definition to a large extent still wildcards," said Stephen Brennock, an analyst with brokerage PVM Oil Associates.

Saudi energy minister Khalid al-Falih, OPEC's de-facto leader, has in recent weeks traveled to Libya and Nigeria to press them on the exemptions, though no public commitments have been announced.

Falih, after meeting with Nigerian counterpart Emmanuel Kachikwu in Abuja last month, said some OPEC members "were complaining" in the summer that the two countries were "overproducing" and contributing to rising OPEC production.

"We have seen a great deal of stability and consistency, both operationally and, more importantly, in terms of security and bringing the sector back to normal," Falih said.

Kachikwu has not spoken to reporters since arriving in Vienna ahead of the OPEC talks, and a Nigerian delegate declined to comment. Mustafa Sanalla, the head of Libya's National Oil Corp, who will be representing Libya at the OPEC meeting, is scheduled to arrive in Vienna later Wednesday.


Sanalla has been very vocal in saying that Libya expects to maintain its exemption, as its output remains extremely prone to the political instability that has plagued the violence-wracked country since 2011.

The rise in Libyan oil output has brought badly needed revenue, but further gains will depend on stabilizing security and attracting foreign investment.

The country also faces national elections tentatively planned for early next year which add to the unpredictability and uncertainty of Libya's beleaguered oil sector.

Libya pumped 1.05 million b/d in November, according to the latest Platts OPEC survey, far below its pre-2011 capacity of 1.6 million b/d.

"OPEC and non-OPEC [producers] for the last two years understood very well the Libyan situation and they gave us full support to keep our production," Sanalla told UAE newspaper The National last month. "Due to the uncertainty of the country, the security threat, due to under-investment, we have our own problems and they are supporting the NOC over the last two years."

Another OPEC delegate said the organization is sympathetic to Libya's needs, but would still ask the country to participate in cuts.

"It is difficult to tell a country that is at war that it is necessary to lower its production, but it is not impossible that Libya accepts," the delegate said.


For Nigeria, cutting output could be tricky, as its oil production is set to climb to around 2.2 million b/d by early 2019, with the startup of the giant 200,000 b/d Egina field due in the coming weeks.

Nigerian oil production has also recovered steadily after it has slumped to around a 30-year low in mid-2016 due to attacks on its key oil infrastructure in the oil-rich Niger Delta region.

But state-owned Nigerian National Petroleum Corp. recently warned that sabotage of its facilities was on the rise, and the country holds elections in February that could bring more instability.

Kachikwu, after meeting with Falih, said it was too early to talk about exemptions. But in a nod to the pressure, he said he would work closely with the six-country OPEC/non-OPEC monitoring committee chaired by Falih to ensure that Nigeria does not upset the coalition's market balancing efforts.

"Since the last exemption, Nigerian [production] has been coming up a bit...our national oil company has been able to raise volumes up from where we were before at the time the exemptions were granted, and so we would work within those parameters and see what our responsibilities are to OPEC," Kachikwu said.

-- Staff,

-- Edited by Jonathan Dart,