OPEC makes historic survival deal, empowers industry during pandemic

OPEC and OPEC+ Member countries have reached a much-needed historic deal for the survival of the industry during the COVID-19 period.

The deal was made after repeated calling and lobbying African producers of oil products to join OPEC in restoring market stability.

On Easter Sunday, OPEC and OPEC+ member countries finally decided to cut oil production by 9.7 million barrels a day starting on May 1st, 2020 and until June 30th, 2020.

According to the deal, from July 1st, 2020, production cuts will be readjusted to 8 million barrels a day until the end of the year.

Finally, OPEC and OPEC+ member countries have agreed on a production cut of 6 million barrels a day from January 1st, 2021 until the end of April 2022.

The baseline for the calculation of the adjustments is the oil production of October 2018, except for the Kingdom of Saudi Arabia and the Russian Federation, both with the same baseline level of 11 million bopd.

“The spirit of cooperation has triumphed and under the leadership of Africa’s own son, H.E. Mohammed Sanusi Barkindo, OPEC reaches yet another truly historic deal for our continent and for global energy markets,” stated NJ Ayuk, Executive Chairman at the African Energy Chamber.

“This clearly shows that in times of critical need we can set aside our differences and unite behind historic deals that will make the difference at home for our companies and our employees. The Chamber will continue to put all its resources behind supporting this coordinated industry effort beyond 2022. Compliance is key, so let’s get to work,” added Mr Ayuk.

Over the years, it is the joint efforts of OPEC member countries along with their allies within OPEC+ that have resulted in building an industry coalition able to put the interests of the market first.

African producers are playing a key part in this effort, not via OPEC member countries Nigeria, Angola, Algeria, Libya, Gabon, Equatorial Guinea and Congo, but also thanks to the support of additional producers such as Egypt, South Sudan, Chad or Niger.