• Wednesday, November 29, 2023
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Stakeholders want Nigeria to withdraw from OPEC

Oil and gas in¬dustry stake¬holders have queried the continuous membership of Nigeria in the Organisation of Oil Ex¬porting Countries (OPEC).
Their arguments are hinged on the fact that the organisation is merely serving the interest of Arab countries who are cur¬rently the brains behind the falling oil prices be¬cause they want to main¬tain market share and give the United States a run for its money invested in shale gas without minding what befalls other member countries that are not Arab.
The operators, who spoke at a symposium organised in honour of Ayodele Marinho, former group managing director, Nigerian National Petrole¬um Corporation (NNPC), on his 80th birthday in Lagos, weekend, asked what is the relevance of the organisa¬tion in the face of the cur¬rent economic challenges facing the country.
Odein Ajumogobia, who was the chief speaker at the event, said that during the past 57 years of crude oil exports, Nigeria had always been exposed to and risked the prospect that oil prices could change rapidly, unpredictably and substantially. No mitiga¬tion measures other than the nation’s membership of OPEC, which has been in place despite the country’s mono-economy for most of that period, and with the potentially calamitous con¬sequences on the national budget, mitigated only by reduced expenditure, debt or both.

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It is instructive that OPEC did not intervene in November 2014, as it had done in 2008, in 1998 and on numerous other occa¬sions to stem the slide of the price by balancing the sup¬ply equation, even in the face of evident oversupply stemming from 5 million additional barrels from the United States shale oil.
At the heart of this mat¬ter on this occasion seems to be the desire of indi¬vidual countries in OPEC, principally Saudi Arabia and Arab states within OPEC – all with the excep¬tion of Libya with signifi¬cantly increased produc-tion capacity – Iran, Iraq, Qatar, and United Arab Emirate (UAE) to protect and maintain their market share through the organi¬sation, even if they have to, as they are indeed doing, individually selling their oil at discounted prices, the
former minister explained.
Also speaking, Ibrahim Waziri, former executive director of the NNPC, asked what is the relevance of OPEC to Nigeria in the face of current realities in the international oil market.
Nigeria is inconsequen¬tial in OPEC setting and the country is there purely based on ego trip, he said, however, advising the gov¬ernment to hands off the operations of NNPC and limit itself to collection of taxes, royalties and regula¬tion of the industry.
But Funsho Kupolokun, a former group managing director of NNPC, differed from the positions of the two above, saying “if Nige¬ria withdraws from OPEC, Saudi Arabia would flood the market with oil and this may compel the price of crude to come down to about $9 a barrel.”