The failure of OPEC led oil producing countries to strike a deal on capping crude production may keep oil prices low through 2017 and beyond, According to Russian Energy Minister Aleksandr Novak said on Thursday.
“If the countries don’t agree (on decreasing production), competition and production increases will continue, and prices may stay low in 2016, 2017, and so on,” Novak told journalists. Russia won’t increase oil production this year, it will equal the 2015 level [almost 11 million barrels a day – Ed.], according to the minister.
Novak considers the initiative to stabilize oil output at January 2016 level as reasonable. The plan to freeze oil production levels was put forward earlier this month by Russia and Saudi Arabia. However, Riyadh says it will not reduce crude production at its own expense and that high-cost American oil producers should make the cuts.
Nigerian indigenous oil and gas firms are currently feeling the pinch and are recording negative cash flows as the plunge in global oil prices lingers, a development that has sent shivers down the spines of many banks.
Nigerian banks are reported to have in recent years increased their financing to the country’s oil and gas sector, providing financing for asset acquisitions and development by indigenous firms.
