President Umaru Yar�Adua on Monday said that the increasing prices of crude oil in the international market were dangerous to the Nigerian economy.
Yar�Adua raised the alarm at the 25th Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists in Abuja.
The President, who was represented by the Minister of State for Energy (Petroleum), Mr. Odein Ajumogobia, said the high oil prices could be harmful in the long run.
He said, �The increase in oil prices will be beneficial to us, the oil producing countries, in the short term. But it is a great danger in the long term as this will fuel recession and also bring reduction in demand.�
Oil prices moved close to $100 per barrel last week but receded to below $94 on Monday amid speculations that the Organisation of Petroleum Exporting Countries could increase output.
He said Nigerian and other OPEC members preferred to be �cautious� and identify a trend so as to control prices at the international markets.
He, however, pointed out that Nigeria had been unable to reap the full benefits of the price hikes.
Yar�Adua noted that if Nigeria �s production of 2.6 million barrels per day had been maintained, the government would have realised more revenue from the oil price increases.
Unrest in the Niger Delta had cut production to 2.2 million barrels per day.
The President , however, said that boosting the nation�s refining capacity at this time, would help build a sustainable energy capacity that would meet local demand.
He said, �When looking at the refining capacity, I think perhaps from the line of local production, it is aimed at providing sufficient oil in the market to meet the growing demand for the product.�
Yar�Adua stressed that the current increases in oil prices could be a doom for the nation, if it failed to map out strategies to reap the benefits while it lasted.
With global energy demand forecast to rise to between 35 and 40 per cent in the next 25 years, he cautioned oil producers , particularly OPEC members , to arrest the trend in the market, in order not to affect the future oil production and demand.
�There will be approximate 3.5 per cent growth in demand per annum over the next 25 years and meeting this demand poses significant challenges,� he said.
The President, who commended the NAPE for choosing �The future of oil and gas: World Outlook,� as the theme of the conference, said that stability and security in the global market and taking care of environmental issues arising from the industry were of key concerns.
He promised that the Federal Government would work towards achieving adequate refining capacity, development of the downstream sector and building of new refineries.
Yar�Adua stressed that the government was committed to achieving zero-gas flaring, but was mindful of the fact that it required certain infrastructure.
He also said that the government had committed itself to the restructuring of the framework for funding joint venture operations and was considering several options so as to ensure flexibility of funding.
The President maintained that Nigeria had the opportunity of being a significant hub in the oil and gas industry in West Africa and the Gulf of Guinea.
He said that achieving the goal required the development of technicians and technologists and the collaboration of organisations like the NAPE.
Earlier, in his address, the President of the NAPE, Dr. Emmanuel Enu, had advocated for a renewed and rigorous attention to unconventional oil discovery in the country.
Enu said this would help Nigeria generate considerable returns in revenue in the future.
He noted that countries like Venezuela , Canada, and Russia , had tried the unconventional oil option and had reaped substantial revenue in recent time.
The President of the NAPE said, ��This is the era for unconventional oils. Crude oil price today is over $90 per barrel and one-year forecast put it at over $120 per barrel. The call is that we should start now to shift our attention towards the development of our unconventional oil resource��.
The Managing Director, International Energy Service, Dr Diran Fawibe, told journalists that the current prices of oil in the international market would have been of enormous advantage to Nigeria , but for the crisis in the Niger Delta.
In an article �The oil boom, 1973�1986: A simple story?,� Arthor E. Berman, the editor of HGS Bulletin wrote, �During the period 1968�1973, the price of a barrel of oil had been stable at about $12 per barrel.
�On October 6, 1973, Israel was attacked by Syria and Egypt in a conflict called the Yom Kippur War.
�OPEC declared an oil embargo on countries such as the United States that had supported Israel.
�Almost immediately there were gasoline and refined petroleum shortages in the US and elsewhere.
�The price of a barrel of oil jumped to nearly $30 per barrel, where it remained for five years.
�Oil prices were next affected by an Islamic revolution in Iran that began in 1978, and later, in 1980, when Iran and Iraq began a military conflict that continued until 1988. By 1980 the price of a barrel of oil exceeded $60.
�Over the next five years, Saudi Arabia publicly sought to persuade OPEC that sustained high oil prices could encourage systemic changes in consumption, such as alternative fuel use and energy conservation, that would deprive OPEC nations of significant value for their oil resources.
�OPEC reached an agreement in October 1986 to control production to achieve a target oil price in the $20 per barrel range. Oil fell to under $20 per barrel in that year and again in 1988.
�Oil prices remained generally in the range between $20 and $26 per barrel until 1998, when prices dropped to $12.48 per barrel, the lowest price since before the Yom Kippur War and OPEC oil embargo.
�This drop was attributed to economic recession throughout the Asia-Pacific region that lowered demand in a previously growing sector for petroleum consumption.
�OPEC reached a new agreement to cut production in November 1997, and, by 2000, oil had again climbed to over $27 per barrel.
�The September 11 attacks on New York and Washington, D.C., caused crude oil prices to decline to $21.50 per barrel. Prices have been rising since 2001 and are currently at the highest level since 1983 -1984.�
Nov132007