Nigeria Output Not Yet Being Cut in Line with OPEC

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Oil companies in Nigeria have not yet been told to cut production in line with OPEC's policy, a Nigerian government spokesman said Friday.

But traders expect some kind of reduction in how much crude is shipped from the world's seventh-biggest exporter.

The Organization of Petroleum Exporting Countries said it would trim quota-busting in March by about 1.5 million barrels a day, roughly 7%. A further cut could come in April, the group said.

The market has reacted with skepticism. OPEC has a poor track record of stopping cheating when oil prices are high.

Shipping volumes for major buyers of Saudi crude remain unchanged, but Algeria has told producers to cut output about 7%.

In Nigeria, a spokesman from the Department of Petroleum Resources, the government's liaison with oil companies, said presidential oil advisor Edmund Maduabebe Daukoru had not notified them of a policy change.

"We didn't get a directive yet, so we haven't passed it on," the spokesman said.

Daukoru has been away from the country.

Traders said it remains hard to tell whether Nigeria has reduced April crude loadings to curb overproduction as they're still trying to piece together programs on the major grades and don't have definite dates yet.

"People are getting allocations in terms of grades and decades," said one trader of West African crude

"Maybe there'll be some kind of reduced program due to OPEC (overproduction busting) but people are not showing cargoes (yet)," the trader added.

It remains difficult to assess the big picture as programs are assembled piecemeal.

"There should be less volume around," said another trader.

"It's not the (output) cut that's worrying people but adherence to the quota. It's difficult to track cargoes and they can reappear - it's happened in the past."

The absence of many traders after a week attending events at a major oil conference in London further clouded the picture.

"I think Monday it should get back to normal," a trader said.

Nigeria produces about 2.32 million b/d. About half of that is produced by a subsidiary of Royal Dutch/Shell Group (RD,SC) in partnership with Nigeria National Petroleum Corp. A spokesman for Shell in London refused to comment.

Total and ChevronTexaco were not available for comment.

Other companies with production in Nigeria include ChevronTexaco Corp., ENI Spa, and Total S.A.

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