Nigeria expresses hope oil price hits $60/b soon

The Federal Government has expressed hope that crude oil price, which hovers around $50 per barrel hits $60/b soon, according to Minister of State for Petroleum Resources, Dr Ibe Kachikwu.

Speaking to CNBC recently, Kachikwu stated that the aspiration is to get oil price to $60/b, “though, it is a tall one, but I think with the numbers available, it is moving towards it.”

“Given the fact that we have not even executed the agreement yet, this is just a momentum building up ahead of the implementation of the agreement,” he said.

On the dangers of oil price becoming so high again, he argued that it may lead to further problems. “If it gets so high, it becomes a problem on its own,” he said.

On the issue of mistrust among member countries, he said it is a different thing now. “In the past, you force people to fall in line, but now, there is a consensus because everybody is hurting. No much of beating people to fall in line this time. There is a group set up to monitor compliance from member nations. Both oil producing nations and non oil producing nations must keep to the deal,” he said.

On the challenge posed by shale gas producers, he opined that “the shale issue is a major challenge because if shale producers mop up production so heavily and cut into the market shares of members of Organization of Petroleum Exporting Countries (OPEC), there will be a reaction. If anybody slips, there will be a problem. So there is need to ensure everyone falls in line.”

Nigeria has been affected negatively since oil price crashed from above $100/b in June 2014 to less than $30/b in January 2016. As a result, the country is exempted from the oil cut deal and the parliament awaits presentation of 2017 budget proposals by President Muhammadu Buhari.