The Hon. Minister of State for Petroleum Resources, Nigeria, and Minister of Petroleum of South Sudan, Hon. Puot Kang Chol joined its other OPEC and OPEC+ counterparts today to agree on a historic deal to cut 9.7 million barrels of oil per day of supply starting May 1st, 2020.
The agreement is historic in nature and should enable oil market to rebalance and keep prices stability until at least 2022.
Hon. Puot Kang Chol said, “South Sudan is East Africa’s only producing country. Our production was over 350, 000 bpd before the civil war and following continuous efforts to put damaged fields back into production, we are currently producing about 185 000 bopd. Our target is to attract more investment into our oilfields to get our nation back to a production level of 300 000 bpd.”
“The current price war and the coronavirus pandemic have affected our economy and prospects for investments so we naturally welcome all efforts to stabilize the oil market and the Republic of South Sudan will continue to play its role in ensuring market stability for the benefit of all stakeholders,” he added.
“Our government will continue doing its utmost best in meeting the oil production adjustment targets and in fighting the coronavirus.
“These are priorities and we will continue collaborating with all our partners to preserve the interests of our industry and our economy,” he concluded.
Along with other African producing countries, South Sudan has been a key supporter of the Declaration of Cooperation and OPEC+ since 2016.
Yesterday, on Easter Sunday, April 12th, 2020, Nigeria joined its other OPEC+ counterparts to bring into effect the agreement to cut 9.7 Million Barrels of supply following the alignment of Mexico.
The intervention of the United States of America resulted in Mexico agreeing to a cut of 100 KBOPD and to be complemented by an additional 300 KBOPD by US Producers.
This will enable the rebalancing of the oil markets and the expected rebound of prices by $15 per barrel in the short term.
This also promises an appropriate balancing of Nigeria’s 2020 budget that has been rebased at $30 per barrel.
As agreed, Nigeria will join OPEC+ to cut supply by 9.7 Million Barrels per day between May and June 2020, Eight (8) Million Barrels per day between July and December 2020 and Six (6) Million barrels per day from January 2021 to April 2022, respectively.
Based on reference production of Nigeria of October 2018 of 1.829 Million Barrels per day of dry crude oil, Nigeria will now be producing 1.412 Million Barrels per day, 1.495 Million Barrels per day and 1.579 Million Barrels per day respectively for the corresponding periods in the agreement.
This is in addition to condensate production of between 360-460 KBOPD of which are exempt from OPEC curtailment.
Today, OPEC and OPEC+ member countries have decided to cut oil production by 9.7 million barrels a day starting on May 1st, 2020 and until June 30th, 2020.
From July 1st, 2020, production cuts will be readjusted to 8 million barrels a day until the end of the year. Finally, OPEC and OPEC+ member countries have agreed on a production cut of 6 million barrels a day from January 1st, 2021 until the end of April 2022.