The Nigerian National Petroleum Corporation (NNPC) yesterday debunked insinuations in some quarters that the recent rise in the crude oil price was as a result of recent militant attacks in Port Hacourt, capital of Rivers State.
The Corporation attributed the development to extraneous factors emanating from the Oil Petroleum Exporting Countries (OPEC) which it said had no connection with Nigeria.
In a phone interview, the Group General Manager, Group Public Affairs Division of NNPC, Mr. Levi Ajunuoma, said the $100 dollar per barrel price was occasioned by speculation, which had nothing to do with the demand or supply as projected in the market, as the market is presently well supplied.
“We want the world to know that we are not in support of the activities of the speculators, as they are making life difficult for both producers and consumers.
Explaining further, he added that “what happened is purely due to other extraneous factors, like geo political factors, while noting that any little tension in any Organisation of Petroleum Exporting Countries (OPEC) is seen as a big issue”.
“For example yesterday, when it was heard that there was a clash between militants and some people were killed, just for mentioning Port Harcourt, speculators cashed it on that and started speculating that it may affect the country�s crude production, without knowing that the where the clash happened is far from the wells producing and would likely affect the production of crude in Nigeria”.
The other reason for the rise of crude oil is the demand from China and India, although this is not new to OPEC, as the organization has always known that the demand from China would continue to grow. As a matter of fact, the forcast for 2008 is a bit lower than that of last year, as last year�s economic growth forcast was 11.5 and this year’s is about 10.5, which the difference is not so much though, OPEC has always forseen this and has also made provision for it.
According to him, the stand of OPEC presently is that the market is well supplied and the organization is probing the activities of the affairs of the speculators that are fuelling the market, and the hedge fund managers who are bent on making more money and unfortunately, we are in the cold season, anything put together would be believable as it would be perceived that if this happens, it would affect production.
“For Nigeria, our stand is that it is not to the interest of both the producer and consumer that for the price is spurt out of hand.
We are all in agreement that we need a price that is good for both the producers and consumers, in other words, we want to produce at a price that is reasonable as far as the investment made in terms of production is concerned and the consumer would like to buy at a comfortable rate”.
“We have also said that high price is not good for consumers as it drives them to search for alternative sources and in Nigeria, we have always said that we do not want to drink our oil, but rather we want to sell it and if the price continues to increase vat this rate, consumers would be forced to look for alternative source and we would end up not selling our crude.”
“So far, OPEC is already taking certain steps, as it plans to meet in the next three weeks over this issue,”he added.
Meanwhile, the OPEC governor of Indonesia, Maizar Rahman, has stated that there is the possibility that the oil price would head above the present level of $100.
According to agency report, he also disclosed that the organization is likely to decide on increasing oil output at the February meeting in Vienna if supply is not sufficient.
Maizar Rahman said that OPEC has the capability to increase production by 500,000 barrels per day, and warned that oil prices could climb even higher.
Crude oil prices briefly soared to $100 a barrel Wednesday for the first time, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will outstrip supplies.
Jan42008