The Organisation of Petroleum Exporting Countries and its allies known as OPEC+ have agreed to ramp up global oil supply, yielding to western pressures to pump more oil.
The decision was made at the 29th OPEC and non-OPEC ministerial meeting held on Thursday.
The group decided to add 648,000 bpd of oil to the market in July and August – up by 216,000 bpd – from 432,000 bpd in recent months.
This comes as some OPEC members reportedly nudged the alliance to exempt Russia from its oil output targets, paving way for major oil producers like Saudi Arabia and the United Arab Emirates to pump more oil.
The meeting noted the most recent reopening from lockdowns in major global economic centers.
It further noted that global refinery intake is expected to increase after seasonal maintenance, and also highlighted the importance of stable and balanced markets for both crude oil and refined products.
OPEC+, therefore, resolved to “reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC ministerial meeting and the decision to adjust upward the monthly overall production by 0.432 mb/d for the month of July 2022.
“Advance the planned overall production adjustment for the month of September and redistribute equally the 0.432 mb/d production increase over the months of July and August 2022. Therefore, July production will be adjusted upward by 0.648 mb/d as per the attached schedule.”
The 13-member alliance scheduled its next meeting for June 30 to determine the oil output for August.
OPEC+ had been shunning calls by the United States for a larger oil output, even in the face of Russia’s invasion of Ukraine and western sanctions on the Kremlin.
Its decision to increase oil output is expected to deal a blow to Nigeria’s already-low oil output as the country would be allocated a higher production quota.
Nigeria has been pumping below 1.4 million barrels per day, lower than the production quota set by OPEC.
Lack of investment, divestments, operational difficulties, as well as oil theft, are some of the issues bedeviling the country’s oil sector.
Re-appointment: Stop Issuing Goodwill Messages, Kyari Urges Stakeholders, Nigerians
Malam Mele Kyari, Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company (NNPC) Limited, has urged stakeholders and Nigerians to refrain from issuing congratulatory messages on his re-appointment.
Kyari, in a statement issued on Wednesday by Chief Corporate Communications Officer, NNPCL, Olufemi Soneye, expressed gratitude to stakeholders and Nigerians for their enthusiasm regarding his reappointment by President Bola Tinubu.
He, however, expressed the need for commitment by all the stakeholders to driving revenue growth and fortifying resilience for the naira and the nation’s economy.
Kyari, who said that he viewed his reappointment as a renewed challenge, expressed his commitment to stabilising the oil industry and enhancing service delivery for increased revenue.
“I humbly appeal to stakeholders in the oil sector and fellow Nigerians to support the company under his leadership to ensure the success of its mandate.
“Consequently, I request all parties concerned to refrain from issuing congratulatory messages on his reappointment,” the statement said. (NAN)
Stakeholders Commend Kyari’s Reappointment, Urge Implementation of Gas Policy
Some stakeholders in the oil and gas industry have commended the reappointment of Malam Mele Kyari as the head of the National Petroleum Company Ltd. (NNPCL).
They gave the commendation in separate interviews on Tuesday in Lagos, while calling for full implementation of gas policy.
Reports says that President Bola Tinubu on Monday reappointed Mele Kyari as the Group Chief Executive Officer (GCEO) of the NNPCL
Tinubu also approved the appointment of a new board and management team for NNPCL with effect from Dec.
Mr Ajibola Oyebamiji, a former President of Nigerian Association of Petroleum Explorationists (NAPE), urged Kyari to make the refineries work.
Oyebamiji advised the NNPCL boss to use his reappointment to increase production, implement gas policy, grant incentives for gas exploration and also encourage local gas utilisation.
According to him, the GCEO’s reappointment is a welcome development and a cheering news for the oil and gas industry.
“He is a round peg in a round hole. For stability of the industry and implementation of the ongoing reforms policies, it is well-deserved.
“He will help maintain and implement the deregulation agenda of President Bola Tinubu’s government and especially bring to fruition the revival of the refineries,” he added.
Also, Dr Emeka Akabogu, Executive Vice Chairman, OTL Africa Downstream, said “Kyari’s reappointment is probably pragmatic, in view of the continuing transitional status of NNPCL into full private sector operations.”
Akabogu said that Kyari had obviously worked hard on this project, and the need to ensure organisational stability is important.
On expectations, he said: “I hope that he consolidates on building a strong and viable national oil company that can compete on equal terms with others locally and internationally.
“He also needs to ensure NNPCL begins to subject itself to strict competition rules, particularly in competing with local operators in the downstream value chain, ” he said.
NAN reports that the NNPCL board consists of Chief Pius Akinyelure, Non-Executive Board Chairman; Kyari as the Group Chief Executive Officer; Alhaji Umar Ajiya, Chief Financial Officer; and Mr Ledum Mitee, Non-Executive Director.
Others include Mr Musa Tumsa, Mr Ghali Muhammad, Prof. Mustapha Aliyu, Mr David Ogbodo, and Ms Eunice Thomas as Non-Executive Directors. (NAN)
World Needs More Policy Ambition, Private Funds, Innovation to Meet Climate Goals
By Simon Black, Florence Jaumotte, and Prasad Ananthakrishnan
With each passing year, the stark reality of a hotter planet becomes clearer and the ensuing risks to the global economy intensify. But as the world is waking up to the scale of the climate crisis, geopolitical tensions and fragmentation risks are undermining our ability to coordinate global actions to solve this planetary problem.
Eight years on from the Paris Agreement, policies remain insufficient to stabilize temperatures and avoid the worst effects of climate change.Collectively, we are not cutting emissions fast enough and are falling short on the needed investment, financing, and technology. The window is closing, but we still have time—just—to change our trajectory and leave a healthy, vibrant, and livable planet to the next generation.
Limiting global warming to 1.5 degrees to 2 degrees Celsius and reaching net zero by 2050 requires cutting carbon dioxide and other greenhouse gases by 25 percent to 50 percent by 2030 compared with 2019. But, as our new analysis shows, the current global commitments reflected in nationally determined contributions would reduce emissions by just 11 percent by the end of this decade.
To make matters worse, current policies are not consistent with commitments, which means that the world is set to fall short of even that meager goal. Business-as-usual policies would see annual global emissions increase by 4 percent by 2030 and reach a cumulative level sufficient to breach the 1.5-degree target by 2035.
More ambition, stronger policies
To get back on track with the global climate goals, we need more ambition now. A fair approach is for countries to target cuts in emissions in line with per capita incomes.
For example, to keep within 2 degrees of warming, high, upper-middle, lower-middle, and low-income countries will need emissions reductions of 39 percent, 30 percent, 8 percent and 8 percent, respectively, by 2030. To stay below 1.5 degrees of warming would entail more drastic emissions cuts of 60 percent and 51 percent for high- and upper-middle income countries.
Ambition alone is not enough. We also need major policy changes to achieve these more ambitious targets. These would ideally be centered on a robust carbon price—rising to a global average of at least $85 per ton by 2030—to provide broad incentives to reduce carbon-intensive energy, shift to cleaner sources, and invest in green technologies.
A carbon price also generates more than enough budget revenues to support vulnerable groups. Around 20 percent of carbon pricing revenues can more than compensate the poorest 30 percent of households. This is in direct contrast to damaging fossil fuel subsidies, which have risen to a record $1.3 trillion annually in explicit fiscal costs alone. Countries must act to phase out such subsidies.
At a global level, cooperation is needed to help assuage fears that carbon pricing would hurt national economic competitiveness. Here, an agreement among large emitters could spur other countries to follow—such as a progressive deal between China, the European Union, India, and the United States. This would cover over 60 percent of global greenhouse gas emissions and send a strong signal to the rest of the world.
Boosting climate finance
The path to net zero by 2050 requires low-carbon investments to rise from $900 billion in 2020 to $5 trillion annually by 2030. Of this figure, emerging and developing countries (EMDEs) need $2 trillion annually, a fivefold increase from 2020. Even if advanced economies meet or somewhat exceed their promise to provide $100 billion a year, the bulk of the financing for these low-carbon investments will need to come from the private sector.
Our analysis shows that private sector share of climate finance must rise from 40 percent to 90 percent of the total in EMDEs by 2030. That means a broad mix of policies to overcome barriers such as foreign exchange and policy risks, underdeveloped capital markets, and too few investable projects.
For example, targeted economic policies and governance reforms can lower capital costs. Meanwhile, blended finance that combines private capital with public and donor funding—including from multilateral development banks—can bring down the risk profile of green projects. Think of first-loss capital, credit enhancements, or guarantees.
At the same time, global policies to increase transparency and comparability of projects, standardize taxonomies and strengthen climate-related disclosure requirements are vital in helping investors make low-carbon choices. Again, this highlights the importance of international cooperation.
Scaling up innovation
Of the 50 percent cut to emissions needed by 2030 to stay on track for the 1.5-degree target, more than 80 percent can be achieved from technologies available today. Getting to net-zero by 2050 will, however, require technologies that are still under development or yet to be invented.
Unfortunately, patent filings for low-carbon technology peaked at 10 percent of total filings in 2010 and have since declined. Worse, key technologies aren’t spreading fast enough to emerging and developing countries.
How can this trend be reversed? Recent IMF analysis shows climate policies—such as feed-in tariffs and emissions trading schemes—boost green innovation and investment flows, and help spread low carbon technology across borders. Moreover, in some countries, lowering trade barriers can accelerate imports of low carbon technologies by 20 percent to 30 percent. Yet again this points to the importance of cooperation: to avoid protectionist measures that would impede the broader spread of low-carbon technologies.
Helping countries meet goals
Wherever climate policy intersects with macroeconomic policy, the IMF is here to help. Our new Resilience and Sustainability Trust provides long-term financing on affordable terms to help vulnerable middle- and low-income countries cope with threats such as climate change. The $40 billion trust has already supported programs for 11 countries, with twice that number in the pipeline.
For our wider membership, we add a climate lens to our economic analysis, policy advice, capacity development and data provision. Why? Because macroeconomic and financial sector policies are critical to harnessing the opportunities of the green transition: for low-carbon, resilient growth, and jobs.
But no country can tackle climate change on its own. International cooperation is more important than ever. Only with concerted action, now, will we bequeath a healthy planet to our children and grandchildren.
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