The
Secretary-General of the Organisation of the Petroleum Exporting Countries
(OPEC), Muhammad Sanusi Barkindo,
has described the Vienna Agreement by the cartel to implement a new production
target of 32.5 million barrels a day, as a testament that the group “is alive
and well”.
Speaking
recently at the Centre for Strategic and International Studies, Washington,
D.C., Barkindo said there has been talk that perhaps OPEC was no longer
important and it had possibly lost the key role it has played in the world of
energy since its founding. The production cut demonstrates that OPEC, which
supplies over a third of the world’s oil, remains key in determining global
crude oil prices.
The decision has since seen a spike in oil prices at the international market, meaning that objectives are being met. But the Secretary General said that any naysayers that may have had doubts about OPEC’s efficacy were proven wrong with historic decision that was made by OPEC to reduce production.
Speaking on
the importance of the agreement, he stated: “The goal
of this agreement is to accelerate the ongoing drawdown of the stock overhang
and to expedite the rebalancing of the market. This is the first production
adjustment OPEC has made since 2008, when the OPEC Conference met in Oran,
Algeria and decided to adjust production to help ease the adverse impacts of
declining prices. It has been exempted from this role due to the geopolitical
challenges it has faced in the past years.
“This
agreement marks the first time non-OPEC countries have joined OPEC in a
concerted effort to help bring stability back to the market. The achievement of
this important agreement is the culmination of months of intensive
consultations held among OPEC member countries and also between OPEC and non-OPEC
member countries.”
Barkindo
said global spending on exploration and production dropped by around 26 per
cent in 2015, and is expected to decrease by an additional 22 per cent this
year.
Speaking on
the importance of the production cut on the Nigeria oil and gas industry,
Minister of State for Petroleum Resources, Dr
Emmanuel Ibe Kachikwu, said the negotiation saw Nigeria get an exemption
from the production cut.
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