Why Nigeria Must Remain in OPEC, By Lukman

www.thisdayonline.com Dateline: undefined/Wed Jan 29 12:46:54 2003/undefined From George Oji in Abuja

Presidential Adviser on Petroleum and Energy, Dr. Rilwanu Lukman has said that given the tremendous influence of the Organisation of Petroleum Exporting Countries (OPEC) on the world oil market, sustaining Nigeria's membership of the organisation will better serve the interest of the country than pulling out of the body.

Lukman also argued that being a country whose over 90 per cent earnings come from oil and gas, and which is easily affected by the dwindling oil prices, Nigeria is better protected under OPEC than outside of it.

Lukman expressed this view yesterday in a lecture he delivered at the Voice of Nigeria (VON) quarterly personality programme, "Global Guest on VON."

"Our projections have shown that as time goes on, the world will become more dependent on OPEC oil. This makes our role as OPEC member very important", Lukman said.

Lukman made this clarification against the backdrop of calls for Nigeria to pull out of the 11-member oil cartel. OPEC, Lukman noted, controls about 75 per cent of total world crude oil reserve and 60 per cent of world traded oil.

With this strength, the presidential adviser stated that Nigeria's role as a member country of OPEC becomes very important. He said that Nigeria has through its activities in OPEC as the fifth largest producer of oil, been able to stabilize the price of oil the world over.

On the current high price of crude oil, Lukman called for caution, saying that history has shown that when prices of oil rise astronomically as is the case now, it also often assumes similar plunge down, with accompanying devastating effects.

Describing the current high price of oil as unreal, Lukman urged all OPEC countries to be prepared for any eventual change. He said that the current high price of oil which hovers around $32 per barrel, is the combined result of Venezuela's oil workers' strike and the threat of war in the gulf region.

"We may be making high revenue now, we may suffer low level of revenue later. We have to be careful to assume that the present high crude oil price may last long", he said.

He cautioned against the danger of making over bloated national projections based on such high prices, and said that the country should always be prepared for any sudden change.

While admitting that high oil prices bring more revenue into the national coffers, Lukman said that the same situation often have negative effects because it results in the encouragement of alternative sources to oil, thus bringing down the relevance of oil. In his own projection, a price of say $25 per barrel is good for the development of the energy sector.