Nigeria: Country to Relaunch Bid for High OPEC Quota

AllAfrica.com Visit The Publisher's Site This Day (Lagos) June 12, 2003 Posted to the web June 12, 2003

Mike Oduniyi, With Agency Report Lagos

The Federal Government said yesterday it would relaunch negotiations with the Organisation of Petroleum Exporting Countries (OPEC) in a bid to get a higher oil production quota for Nigeria.

But OPEC. at an extra-ordinary meeting held in Qatar yesterday, decided to maintain its current production ceiling of 25.4 million barrels per day (bpd). This leaves Nigeria's production quota at 2.094 million bpd compared to her capacity of 2.6 million bpd.

The Director, Department of Petroleum Resources (DPR), Mr. Macaulay Ofurhie said in an address delivered at a seminar on offshore oil and gas technology in Lagos, that the need to renew the bid for a higher OPEC quota was based on {he challenges posed by successes Nigeria had recorded in deep offshore exploration.

"As production commences from the deepwaters, Nigeria as a strong member of OPEC and the only one with large deepwater discoveries certainly will need to renegotiate her quota allocation level with OPEC," said Ofurhie, who was represented at the event by a-. Deputy Director in DPR, Mr. Kayode Oloketuyi. According to the DPR chief, the Federal Government needed to get an increased OPEC quota so as to continually convince the deepwater operators that "Nigeria is an investment friendly country and to guarantee sustainable development of the nation's deepwater assets."

Ofurhie said that the discovery of giant oil and gas fields in the Nigerian deepwaters and the unfolding potentials in its offshore basins are indications that with right planning and sustained growth, Nigeria will emerge as the main center of deepwater activities in the Gulf of Guinea, as Brazil currently is for the Gulf of Mexico.

Oil workers last weekend had expressed concern that oil companies under the present OPEC quota regime, will not be able to maximise output from these new fields, mostly located in the deep offshore, on which several billions of dollars have been invested. They also alerted the Government on the danger posed by the quota restriction to its revenue earning power.

Oil fields soon to go into production include Shell's Forcados Yokri and Bonga fields. Total's Amenam/Kpono field and ExxonMobil's Erha field.

Oloketuyi later told THISDAY on the sideline of the seminar that the Federal Government was approaching the demand for higher quota using political and technical means.

"We have submitted the technical details of what we have been doing in the deep offshore where we are. The political approach, which include demonstrating our economic needs as well as the need to sustain our democracy will be handled by government," he said.

The seminar was organised under framework of institutional co-operation programme between Nigerian government and its Norwegian counterpart.

According to Charge d'Affaires of the Norwegian Embassy in Nigeria. Kristin Teigland. the seminar aimed at sharing experiences enhance transfer of technology, assist in capacity and competence building.

Meanwhile, OPEC ministers ended a meeting in the Qatari capital of Doha yesterday, ieaving the group's production levels unchanged.

OPEC President Abdullah bin Hamad al-Attiyah, said the 11-nation group would meet on July 31, this year to reassess the situation.

Al-Attiyah said that the July meeting would look at the impact of Iraq's return to the oil market and that OPEC would consider all options to maintain its interests.

Contrary to the widely held belief that the group would cut down on production to accommodate the entry of Iraqi oil into the market, OPEC's decision was said to be hinged on the fact that Iraq oil would not be reaching dhe market fast enough.

Analysts said prices had not retreated because Iraq has been slow to revive production, and political unrest in Venezuela and communal crises in Nigeria, had suppressed in the two influential OPEC member-nations.

Iraqi oil officials appointed by the US. occupation authority said on Monday that crude exports would not resume until month's end and that it would not reach pre-war levels until the middle of 2004.

Crude oil prices were at between $27 and $29 a barrel yesterday.