FG Impressed by Saudi’s Voluntary Oil Production Slash

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The federal government yesterday has said it is impressed over Saudi Arabia’s recent voluntary cut in its crude oil production by over one million barrels per day, to further reduce the impact of the current glut in the international market.

Minister of State for Petroleum Resources, Chief Timipre Sylva, who conveyed the message in a statement signed his Special Adviser, Mr. Garba Deen Muhammed,in Abuja, said such sacrifices by members of the Organisation of Petroleum Exporting Countries (OPEC) were capable of ameliorating the slumping demand that had brought the price of crude to an all-time low.

“It is by difficult sacrifices like this one, the Saudi government is making that the world economy can recover faster than expected. It is not an easy decision and that is why I feel compelled to express appreciation and support to Saudi Arabia for its leadership role in both OPEC and OPEC,” Sylva said.

OPEC countries had on April 12, 2020 agreed to cut up to about 10mb/d in order to stem the slide in oil prices which in some cases had dropped to as low as $10 per barrel, throwing oil-dependent economies in chaos.

However, in addition to the agreement last month, Saudi Arabia voluntarily made additional cuts of over one million barrels per day; a voluntary action that has been complemented by similar action from a few other OPEC members such as Kuwait.

“The gradual revamp of crude oil prices in the last few days is a consequence of these actions by OPEC and the effort of the Saudi government,” Sylva observed.

The minister assured that on its part, Nigeria had been working to keep to the April OPEC agreement in spite of obvious technical and other related challenges.

Meanwhile, Sylva has described as ‘historic’, the long-awaited take-off of the Nigeria LNG Limited’s Train 7 Project ‘because of its significance for the nation’.

He said that with the award of the EPC contracts, the construction phase of Train 7 could now commence in earnest, stressing that Nigeria would retain her pride of place in the world’s list of top LNG suppliers.

The minister added that the government would receive added revenue through dividends, taxes and levies, emphasising that the project would help NLNG to further deepen its domestic LPG market stimulation efforts.

“In addition, the award of an EPC contract in the LNG industry is welcome news anywhere in the world. Although it might mean more competition for industry operators, it ultimately promises greater availability of cleaner energy necessary for the sustainability of the environment” he said.

He commended all those who made the development possible, assuring them of the continued support of the ministry of petroleum resources and the federal government.

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