Nigeria Expects OPEC to Hold Firm in December on $70 Oil

(Bloomberg) -- OPEC and its allies are likely to keep oil-production policy steady when they meet in December as current prices near $70 a barrel suit all members, Nigeria’s oil minister said.

“I’d be surprised to see anything dramatic” when the coalition gathers, Petroleum Minister Emmanuel Ibe Kachikwu said in an interview in London. “We’re likely to push the can forward” as “$70 is the comfort level, for us and for everybody.”

Mixed signals from the Organization of Petroleum Exporting Countries and its partners have roiled markets over the past week. While a committee representing the alliance signaled late last week it could restrain output in 2019, and Saudi Arabia warned of a potential renewed surplus, Russia said it could increase production beyond record levels amid risks of a shortage.

New supply from around the world, from U.S. shale oil to projects in Nigeria itself, could swell global output by between 1 million and 2 million barrels a day next year, Kachikwu said. That could force the OPEC+ alliance to consider restraining supplies again, he said.

OPEC will meet on Dec. 6 in Vienna and hold a follow-up meeting with its partners outside the organization the next day.

Nigeria aims to add about 200,000 barrels a day at the Egina oil field in the first quarter of next year, bringing total output of crude and condensates to the country’s target of 2.2 million a day, according to Kachikwu. Other projects, such as Bonga and Zabazaba, are still awaiting a final investment decision and aren’t likely to produce before the end of the decade.

Kachikwu was returning via London from the U.S., where he held a “very positive” meeting with current and potential investors. He also received an honorary citizenship from the states of Georgia and South Carolina.

The west African country is still struggling with its refining system, which operates well below capacity. Repairs will start early next year, Kachikwu said, adding that Nigeria will announce the financiers for that work later in 2018.

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