Oil overproduction: Nigeria, others asked to submit compensation plans
Nigeria and other countries that have not fully complied with the oil production cut deal by the Organisation of the Petroleum Exporting Countries and its allies have been asked to submit their implementation plans for the required compensation by the end of next week.
The Joint Ministerial Monitoring Committee, which held its 21st meeting via videoconference on Wednesday, reviewed the monthly report prepared by its Joint Technical Committee and developments in the global oil market since its last meeting on July 15, 2020.
The committee emphasised the ongoing positive contributions of the Declaration of Cooperation in supporting a rebalancing of the global oil market, according to a statement.
It recalled the historic decisions taken by all participating countries in the deal on April 12, 2020 to adjust downwards overall crude oil production, and the unanimous decisions taken at the meeting held on June 6, 2020.
The outcomes of the June meetings extended the first phase of the production adjustments until July 31, 2020; provided a compensation mechanism for participating countries that could not achieve full conformity; and endorsed monthly meetings of both the JMMC and the JTC to strengthen monitoring and keep abreast of very dynamic market fundamentals.
The committee reviewed the crude oil production data for the month of July and welcomed the significant performance in overall conformity for participating OPEC and non-OPEC countries of the deal, which was recorded at 97 per cent in July.
The statement said members of the JMMC reaffirmed their commitment in the deal to achieve full and timely conformity.
It said, “In addition, the underperforming members of the committee reaffirmed their commitment to compensate for the shortfalls in May, June, and July 2020 by the end of September 2020.
“It also requested other underperforming participating countries to submit their plans for implementation of the required compensation for the overproduced volumes to the OPEC Secretariat by the end of next week, August 28, 2020.”
The committee emphasised that achieving 100 per cent conformity from all participating countries in the deal and compensating for the shortfalls was not only fair but vital for the ongoing rebalancing efforts and to help deliver long-term oil market stability.
It instructed the JTC and the OPEC Secretariat to closely monitor and report to the JMMC on the implementation of the required compensation by the underperforming participating countries as stipulated in their plans.
