London — Nigeria will refocus on oil projects that deliver higher returns to keepproduction within the limits set by OPEC, oil minister Emmanuel Kachikwu saidlate Tuesday.
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The country has been struggling to make good on its pledge not to produceabove 1.8 million b/d under the OPEC/non-OPEC output agreement, with outputhitting its highest level in more than two years in January at 1.93 millionb/d, according to the S&P Global Platts survey.
"Oil prices are currently depressed at $60-$70/b and, coupled with theproduction quota imposed by the Organization of Petroleum Exporting Countries,Nigeria will begin to look at its priorities differently," Kachikwu said in anoil ministry statement.
Africa's biggest oil producer "will only consider projects that are of highernet value for the country," he added.
Nigeria is working hard to keep its crude oil output within the OPEC quota,and would therefore need to focus on getting more revenue from existingprojects by reviewing the production sharing contract (PSC) terms, he said.
Kachikwu made clear this means prioritizing the approval of oil projects withinternational oil companies and reviewing the fiscal terms in the agreementswith foreign partners to develop deepwater oil fields.
Nigeria has not seen the start-up of new big oil fields in almost half adecade. But later this year it will get first oil from the 200,000 b/doffshore Egina oil field.
While many OPEC members have pointed to the rise in oil prices as a sign ofthe benefits of the production cut deal in which OPEC and its allies cutproduction by 1.8 million b/d from January 2017, it seems Nigeria is stillfeeling the squeeze.
It had been exempted from the cuts as it dealt with civil unrest from groupsin the Niger Delta oil producing region that have sabotaged pipelines andother infrastructure to protest what they see as inequitable sharing of oilrevenues.
But at the latest OPEC/non-OPEC meeting Nigeria and Libya were brought intothe fold with a combined 2.8 million b/d quota.
--Paul Hickin, firstname.lastname@example.org
--Edited by Jeremy Lovell, email@example.com