The Minister of State for Petroleum, Dr. Ibe Kachikwu, will preside over the 168th (Ordinary) meeting of the Organisation of Petroleum Exporting Countries (OPEC) today in Vienna.
Following his elevation as the Minister of State for Petroleum Resources, Kachikwu has replaced the immediate past Minister of Petroleum Resources, Diezani Alison-Madueke, as the conference president of OPEC.
But just as OPEC members were preparing for the meeting, prices of crude oil fell to a seven- year low yesterday, from $43.37 a barrel the previous day to $42.49 per barrel.
Already, OPEC members have been arguing over who should cut oil production to bring an oversupplied market back into balance even as Iran yesterday, rejected Saudi Arabia’s call to join OPEC production cut.
Iran said instead, it would move forward with plans to boost its output by one million barrels a day after Western sanctions are lifted in January following an agreement with world powers over its nuclear programme.
Iran’s Oil Minister, Bijan Zanganeh, is not sure whether his country will be willing to bow to pressure to accept production cut just to stabilise the market.
But, while disclosing his plans for OPEC, Kachikwu promised to do his best to delay Iran’s intended oversupply of crude oil, to control pricing.
With international crude oil prices today struggling to stay above $40 per barrel, it is proving to be a very challenging time for the oil sector and its primary stakeholders.
Speaking with reporters in Lagos, he said: “I think the key thing will be obviously crude oil price. There is a lot of sensitivity on that, $42 currently and with potential to go down if Iran throws their barrels into the field.
“My first target as I meet with ministers one-on-one is to try to delay Iran’s flooding of the market to the last quarter of next year. I will be talking with Iran’s oil minister on that so that we can stabilise the price.
“Maybe, hopefully, by the first or second quarter of next year, we will begin to see how that statement can now embolden us to go and begin to address removing the 1.5mbpd production that is lying in the market internationally.”
Saudi Arabia’s Deputy Minister of Petroleum and Mineral Resources, Prince Abdulaziz bin Salman Al Saud, said in his address at the 6th Asian Ministerial Energy Roundtable in Doha, Qatar, that both the industry and the supply chain remained highly vulnerable to sharp price movements.
“This is the first time since the mid-1980s that the oil and gas industry will have cut investment in two consecutive years.”