The Organisation of Petroleum Exporting Countries (OPEC) has mandated Nigeria, and other laggards in the first month of the oil production cut, to submit their oil production cut compensation plans on Monday.

The deal to cut oil production by 9.7 million barrels daily that went into effect on the first of May was agreed upon to help stabilise the oil market and aid its recovery after the historically low prices due to a drastic drop in supply in April.

In the last OPEC meeting, it was agreed that the countries that had exceeded their quotas were to compensate with additional cuts. Angola, Gabon and Azerbaijan are the countries that are also yet to submit their plans alongside Nigeria. Iraq and Kazakhstan have reportedly taken steps to make the necessary compensation cuts.

During the virtual 19th Joint Ministerial Monitoring Committee (JMMC) that held on 18th June, 2020, under the leadership of Prince Abdul Aziz Bin Salma, Saudi Arabia‘s Minister of Energy, and his co-chair, the Minister of Energy in Russia, Alexander Novak, the resolution of the OPEC meeting for laggards to compensate by further cutting their production rates was mentioned as the right thing to do.

The committee called on the OPEC secretariat to communicate with defaulting countries to get their production cuts. It said that complying with the cut was not only fair and equitable, but also key to the ongoing efforts to stabilise and aid market recovery from the pandemic.

Excerpts from the report of the meeting:

“The Committee took note of the overall conformity of 87% for the month of May 2020. It also observed individual country conformity levels and reiterated the critical importance that all Participating Countries achieve their 100% level, and make up for any monthly shortfalls in the months of July, August and September. It welcomed the expressed commitments from those countries below the 100% May conformity level and specific compensation plans highlighting how this will be accommodated, and delivered, between July and September.

“The Committee emphasized the critical importance of adhering to full conformity, and compensating the overproduced volumes in the months of May and June, during the months of July, August and September 2020, in accordance with the Statement of the 11th OPEC and non-OPEC Ministerial Meeting of the DoC (6 June 2020), in particular with reference to the five elements agreed.

“The Committee would like to thank those participants, namely Iraq and Kazakhstan, which have already submitted their compensation schedules, and agreed to give other underperforming participants, which have not yet submitted final plans, until next Monday 22 June 2020 to submit their schedules for compensation to the OPEC Secretariat.

“Furthermore, the Committee mandated the Secretariat to reach out to all the underperforming Participating Countries to submit their schedules for compensation by the above mentioned date.”