OPEC loses $1trn to oil price fluctuation

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Mohammed Barkindo: OPEC Secretary General
Mohammed Barkindo: OPEC Secretary General

By Yetunde Bada

The Organisation of Petroleum Exporting Countries (OPEC) has lost over $1 trillion to fluctuation of oil prices, its Secretary General, Dr Mohammed Barkindo has said.

Barkindo disclosed this on Monday while addressing a news conference organised by the Minster of State for Petroleum, Dr Ibe Kachikwu.

According to the OPEC scribe who is on a four-day working visit to Nigeria, member countries of the organisation were unable to earn about $1 trillion between 2014 and 2016.

He said the industry further lost $1 trillion in terms of deferred projects and outright cancellation of projects across its entire value chain.

“We need consistent investments in order to maintain current production and take care of reserves and secure future supplies,” he said.

He said it was agreed that non-members of OPEC be invited to build a platform of 24 producing countries to agree on a joint supply agreement seeking to adjust about 1.8 million barrels a day.

“For the first time in history we were able to build a platform of 24 producing countries within six months in order to address the stock overhang which has been the variable to the supply equation that had sent this market off balance since 2014.

“Today, I can confidently report that those three historic events have altogether changed the energy landscape and turned a historic page in oil for good.

“We are on 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 on a continuous basis,” he said.

He commended the government for staying afloat during the price-crash, calling the period “the worst energy circle in recent memory’’.

“ Some of us who have been around for quite a while have witnessed all these five circles and it is a consensus in terms of the gravity of this circle, prices have crashed by over 80 per cent from the fall of 2014 to January 2016.

“How you survived as a government and as institutions under this great industry remains a miracle.

“I visited all other countries and I have seen how they struggle but you have weathered the storm, I think the worst is behind us.’’

He said the agreements reached by the cartel and non-OPEC members in Algiers and Vienna during their meetings in November and December 2016 were lifesaving measures as they had overcome market challenges.

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