Nigeria does not expect to see a change in oil output from members of the Organization of Petroleum Exporting Countries at the group’s upcoming emergency meeting being held Feb. 1 in Vienna, a senior oil official said.
H. Odein Ajumogbia, Nigeria’s minister of petroleum, attributed the volatile high oil prices to “speculation on geopolitical factors,” stressing that price was not underpinned by the fundamentals of supply and demand. “There is no need to suggest intervention, and we have been looking to see if there is a trend in the price, but it has gone up and down.”
Very high oil prices could eventually backfire by dampening global demand, Ajumogbia added, particularly in the US, which in turn, could affect China and India. “It is a difficult question to answer on [which] moves OPEC will make this year,” he said.
Nigeria plans to increase its oil reserves to 40 billion bbl by 2011 and to increase production to 4 million b/d by the same date, although that would mean an increase in its OPEC production quota.
The minister confirmed that Nigeria wants to invest $30 billion or more over the next 4-5 years in the upstream sector, with the money coming from both domestic and external financing. In 2008, Ajumogbia said, Nigeria is looking for $3.9 billion from capital markets, banks, and partners. “It is clear that the more we invest, the more we will get back,” he said.
He told OGJ that Nigeria missed its zero natural gas flaring target Jan. 1. It will now impose “fair but reasonable” penalties on operators that continue to flare gas. He said the president may set a new target, possibly yearend 2008. “We are determined to eliminate gas flaring,” Ajumogbia said.
The penalty aims to compensate for wasting the resources, he said, but it won’t dissuade operators from producing gas.
Reforms of Nigeria’s National Petroleum Co. are on course, he added. NNPC will be split into units to make it more productive and effective in a global energy market (OGJ Online, Sept. 10, 2007). “The power and gas committees will write their reports by the end of February so that they can meet the president’s 6-month deadline.”