Yemisi Izuora
Oil majors operating in Nigeria have opened discussions with the Nigerian National Petroleum Corporation, NNPC, on strategic reduction of onshore and offshore production.
Nigeria and other West African exporters have no choice now but to cut down on shipments, said Reuters quoting unnamed trading source who cited poor demand and loss-making prices.
Similarly across oil producing nations, oil majors are haggling with national governments over how to share out deep production cuts that add to their pain from low oil prices and depressed fuel sales because of the COVID-19 pandemic.
Oil majors have traditionally escaped big cuts in Organization of Petroleum Exporting Countries, OPEC nations, such as Nigeria, and have never experienced curbs in countries outside the OPEC club, such as Kazakhstan, where they are protected by special clauses agreed with governments.
But those production sharing agreements (PSA) are being laid aside following a pact between the OPEC and its allies (OPEC+) to cut production by 23 per cent to bolster prices as coronavirus lockdowns reduce global energy demand by a third.
Such unprecedented output reductions, effective from May 1, are impossible in most nations without the help of majors.