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OPEC, Allies will Stabilise Oil Market, Says Saudi Minister

Saudi Arabia’s Energy Minister, Khalid Al-Falih, has said that member countries of the Organisation of Petroleum Exporting Countries (OPEC) and its allies led by Russia still have a lot of work to do to balance global oil markets, and are prepared to do what is necessary in this regards in the second half of 2019.

According to Bloomberg, Al-Falih, said yesterday at a news conference in Baku, Azerbaijan where a committee of OPEC and its allies responsible for monitoring output are due to meet today, that the group needs to “stay the course” until June as its job is nowhere near complete in terms of restoring oil-market fundamentals.

Al-Falih’s disclosure of the group’s commitment also came at a time the Nigerian National Petroleum Corporation (NNPC) reported that it made a trading profit of N12.13 billion from its operations in December 2018.

Bloomberg reported that U.S. inventories have remained significantly above normal levels, and that there was a risk of oversupply in the short term.

Accordingly, OPEC and its allies have entered their third year of curbing supply in order to defend crude prices. The Bloomberg quoted Russian energy minister, Alexander Novak, to have indicated that Russia equally plans to achieve its promised cuts in output by the end of March or early April, adding that it needs time to make its promised cuts due to harsh weather.

Meanwhile, a statement from the Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu in Abuja said that in December 2018, the NNPC made a trading profit of N12.13 billion, following higher revenue posted by its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).

Ughamadu, also disclosed that within the same month, the corporation recorded an upswing in pipeline vandalism by 34 per cent.

The statement explained that the December edition of NNPC’s monthly operations and financial report contained these information, and that it had 257 vandalised points on its pipeline in December as against 197 in November. It added that one pipeline point failed to be welded while six points were ruptured.

It said Ibadan-Ilorin, Mosimi-Ibadan, and Atlas Cove-Mosimi network accounted for 90, 69 and 57 compromised points or approximately 34 per cent, 26 per cent and 22 per cent respectively.

Aba-Enugu pipeline link, the statement noted accounted for seven per cent, with other locations accounting for the remaining 11 per cent of the pipeline breaks.

According to it, despite this, the NNPC supplied 1.80 billion litres of petrol in December, translating to 58.17 million litres every day.

In terms of value, it noted that N241.46 billion was realised on the sale of white products in December 2018, compared to N146.56 billion made in November 2018.

In the gas sector, it explained that gas production increased by 12.22 per cent at 240.64 billion cubic feet compared to output in November 2018. This it stated translated to an average daily production of 8,021.21 million cubic feet per day (mmscfd).

It said the daily average natural gas supply to gas power plants increased by 5.36 per cent to 774mmscfd, equivalent to power generation of 3,131 megawatts (MW).

“Out of the 240.59bcf of gas supplied in December 2018, a total of 151.13 bcf of gas was commercialised, consisting of 38.61bcf and 112.52bcf for the domestic and export market respectively,” the statement added.