The Organisation of Oil Exporting Countries (OPEC) Secretary General Mohammed Barkindo, yesterday said the worst days of the oil crisis are over but the challenge remained how to consolidate the gains.
He said there is an unprecedented 90 per cent compliance level to the the joint decision that the OPEC and non OPEC members took in December which led to some member countries withdrawing about 1.2million barrel per day and the 11 non- OPEC withdrew 11 barrels,.
The OPEC chief, who spoke in Abuja, during a visit to the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu said: “So, we remain optimistic that the worst is over for the circle. The challenge now is how to solidify this platform of 24. I must report to you that the signals we are getting from the non OPEC side is highly positive.”
According to him, Equitoria Guinnea had applied to join the organization
According to him, the market would dictate the equilibrium price eventually and the restoration of the balance of the one valuable of stock will bring the market to balance and the equilibrium price that will be fair to producers and consumers that will bring back investment to the industry.
Asked whether Nigeria would continue to enjoy, he said “Going forward , this decision is for six months and therefore, this country continues to be exempted for this six months. And we will continue to pray and hope that they will recover their production and rehabilitate their production facilities and return to the market full because the market needs every barrel that Nigeria can produce or Libya or the Islamic Republic of Iran.
“The demand figures continue to show robust growth of over 1 million a day going forward. And therefore, while we are working hard to restore this stability, the focus is how we can sustain it going forward.”
He said the global oil industry supply chain lost $1trillion to the crisis, noting that “the industry globally had lost nearly $1trillion in terms of deferred projects and adverse cancellation of projects across the supply chain.”
Barkindo who said the decisions to cut supply had been beneficial to the industry, added that “we are in the course of pulling this industry out of the worst recession that we have entered to restore stability to the market on a sustainable basis that will allow investments to come back.”
According to him, the rate of turnover of the Chief Executive Officers of the Nigerian oil industry was part of its challenges. Kachikwu projected that oil would hit $60 per barrel.
He noted that OPEC had lost its credibility, which it is now recovering from.
The minister said with the restoration of confidence in the organization, investors were no longer considering reserve but a future rise in price.
He said: “It is a fact that he (Barkindo) has given OPEC a new face . OPEC had lost credibility that nobody was listening to us whenever we came for meetings.
“But today, with the build up in the U.S. of reserves, nobody is looking at that in terms of pricing oil. They are simply looking at what OPEC is doing. As the momentum rose, we are actually going to be at $60 roof.”