The Organisation of Petroleum Exporting Countries (OPEC), is meeting today, Thursday, November 30 to debate whether to cap Nigeria and Libya oil production.
The two countries have been exempted from oil supply cut that was put in place in 2016.
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Due to the activities of militancy in the Niger Delta region, Nigeria’s oil production was reduced forcing OPEC to exempt Nigeria from the oil supply cut.
However, with peace returning to the region and the suspension of hostilities by the militants, Nigeria’s oil production has increased with the country taking back its place as the biggest oil producer in Africa.
Reuters reports that OPEC will debate whether to cap Nigeria’s oil production to 1.8 million barrels per day.
This may affect Nigeria’s budget as it is contrary to Nigeria’s projection of oil revenue and funding.
President Muhammadu Buhari had presented the 2018budget of N8.612 trillion to the National Assembly.
This is with a projected of oil output of 2.3 million barrels per day at an estimated price of $45.00 dollars per barrel.
If the OPEC’s oil cap goes through, Nigeria will be forced to adjust its estimated output to OPEC’s order and this may affect the implementation of the budget.
NAIJ.com had reported that oil producing countries are expected to extend a production cut accord later in November although the duration is still being discussed.
The Punch reports that this was disclosed by the United Arab Emirates Energy Minister Suheil al-Mazrouei on Monday, November 13.
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Source: Naija.ng
