At a panel session at the ongoing World Economic Forum at Davos, Switzerland, Nigeria’s Minister of State for petroleum resources, Dr Ibe Kachikwu, joined other OPEC members, such as Venezuela, in requesting for an emergency meeting of the oil-producing nations to address the current oil crisis and discuss steps to possibly cut down oil production and boost oil prices. The call had Iran and another prominent OPEC member country opposing, claiming that the time is not yet right for such an intervention, Leadership reports.
Dr. Kachikwu mentioned that with the oil industry in its current state, the members of the OPEC, which produce about one-third of the world’s oil, needed to do something proactive soon.
There is a lot of energy around trying to meet earlier. Obviously, some of that is a panic reaction. Do we just sit back and watch? Or do we put more efforts in talking to countries, like Russia, to try to get some consensus of what we need to be doing?
The oil minister also added;
There should be an intention to make a firm decision in such a meeting; otherwise, the meeting will have negative impacts on world oil markets. The important thing is that there must be an intention for change, but we have not yet received such a signal.
Iran’s oil minister, Bijan Zanganeh, however disagreed with the call for an emergency meeting saying that the organisation currently has little intention of making a drastic change.
Reuters report that some key countries such as Saudi Arabia are yet to make their stance on the oil production matter known .
Analysts in their various opinions say that OPEC (which has member countries that depend hugely on oil revenue for its foreign exchange) and requires a consensus from all its members before it initiates a change, has to make a decision very soon as the global economy heads for what is potentially a very volatile year.
OPEC’s Secretary-General, Abdullah al-Badri has however yesterday said, OPEC and non-OPEC oil producers need to jointly tackle global stocks overhang to enable oil prices recover with investments in new fields.
Iraq yesterday announced high oil production as oil prices fell three per cent, feeding into a heavily over-supplied market. Iraq’s oil minister said oil output had reached a record high in December. Its fields in the central and southern regions produced as much as 4.13 million barrels a day, the government said.
Meanwhile, as oil prices continue on the downward slide, Nigerian oil firms may be producing at up to $5/barrel loss, as average production costs for independent and marginal field producers is between $30 and $35/barrel.