By Udeme Akpan
THE price of Bonny Light, Nigeria’s Bonny Light, has bounced back to $40 per barrel, as the Organisation of Petroleum Exporting Countries, OPEC and the Gas Exporting Countries Forum, GECF, have ended a successful engagement over the oil market.
Despite the rise, Nigeria would still be challenged to fund its 2020 budget, which was benchmarked on $28 and 1.8 million barrels per day, mb/d output, especially as the cost of production remains high at $30 per barrel.
London oil market trader, who confirmed a general leap in prices, attributed the development to the ease of the coronavirus pandemic lockdown, which has encouraged increased socio-economic activities, increased petroleum products utilisation and hope on market stability.
However, OPEC and GECF have agreed to work together toward achieving increased stability in the market.
In a statement obtained by Vanguard, OPEC stated: “OPEC Secretary-General, HE Mohammad Sanusi Barkindo, met with his counterpart at the Gas Exporting Countries Forum, HE Yury Sentyurin, for the inaugural Technical Meeting of the OPEC-GECF Energy Dialogue on 22 June, held via videoconference. The meeting builds upon the bilateral Memorandum of Understanding (MoU) signed last year.
“The meeting reflected on the impact of the COVID-19 pandemic on the global economy as well as oil and gas markets. Exchanges were also held on medium- and long-term energy market assumptions and perspectives, and technical collaboration on data and statistics.
“HE Barkindo briefed the GECF’s SG on recent decisions taken by participants of the Declaration of Cooperation at the 9th and 10th and 11th (Extraordinary) OPEC and Non-OPEC Ministerial meetings held on 9-10 and 12 April and 6 June 2020, respectively.
“These meetings decided to adjust overall crude oil production by 9.7 mb/d for May and June, 2020, with a further extension until the end of July agreed at the 11th meeting. Further adjustments are to take place for a total of two years under the initial agreement, until 31 December 2020 by 7.7 mb/d; and from 1 January 2021 to 30 April 2022 by 5.8 mb/d.
“HE Barkindo spoke about the great many things the GECF and OPEC have in common, including many of the same member countries, the essential nature of both for the development of humankind and organizational goals.”
Also, HE Sentyurin thanked the OPEC Secretary-General for supporting the building blocks of this mutually beneficial dialogue.
He said that since HE Barkindo visited the GECF Headquarters in 2018, the cooperation between the two organizations has been developing incrementally.
He recalled the signing of the MoU to “exchange knowledge, experience, views, information, data and practices in the areas of mutual interest,” last October on the sidelines of Russia Energy week, calling it a milestone between the organizations.
HE Sentyurin added that the 1st technical dialogue represents a “new chapter in our collaboration”.
GECF’s SG praised the joint work of OPEC and the GECF at various international fora, including the Joint Oil and Gas Data Initiative, the International Energy Agency and the International Energy Forum.
He stated in light of the COVID-19 pandemic and subsequent severe drop in demand for both oil and gas, “Maybe now it’s high time that the gas and oil industry implements the knowledge and solutions of the oil industry. To use the best practices demonstrated by your community.”