Buhari in diplomatic shuttle to stabilize oil price

By Levinus Nwabughiogu, Michael Eboh & Ediri Ejoh, with Agency Report ABUJA — President Muhammadu Buhari jets out to Saudi Arabia and Qatar today to engage officials of both countries in further talks to ensure stability of oil prices. Nigeria, yesterday, agreed to freeze the country’s crude oil production at 2.2 million barrels per day this month, same as the level recorded in January, in a bid to address the declining price of crude oil in the international market. The government’s move is a reaction to Saudi Arabia and Russia which have agreed to freeze oil output at near-record levels, the first coordinated move by the world’s two largest producers to counter a slump that has pummelled economies, markets and companies. Buhari Buhari Speaking after a meeting with Qatar’s Energy Minister, Mohammed Al Sada and Qatar Petroleum Chief Executive Officer Saad Sharida Al Kaabi in Doha, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, said the decision was in support of the decision of Saudi Arabia and Russia to freeze oil production. He, however, disclosed that Nigeria was looking for ways to increase crude oil production, not for the purpose of export but for local consumption. “Nigeria will continue to look at the possibility of increasing production, not to sell it, because we have local consumption that is essential for us. “Right now, we are not even exporting the quantity that OPEC has given us. Demand from domestic refineries is at least 500,000 barrels of oil a day,” he explained. Kachikwu also gave far-reaching recommendations on how Iran and Iraq could regain some of their lost market share due to sanctions and war. He said: “Countries like Iran and Iraq have been out of the market for a while and if they are to come back you should not freeze them out where they are, you should freeze them at a higher level. By June, we will come very close to tightening the market.” Kachikwu stated further that there was little chance that the Organization of Petroleum Exporting Countries, OPEC, will hold an emergency meeting before the next regular one scheduled for June. According to him, “rather than focus on emergency meeting, we need to talk more because if you held a meeting when you have not agreed largely on the solution, it would not be productive and would also affect the price of oil.” Buhari jets out Meanwhile, President Muhammadu Buhari is billed to leave Abuja for Suadi Arabia and Qatar today to engage officials of both countries in talks for the stability of oil prices. The President, who would be away for a week, will be accompanied on the journey by a high-powered Federal Government delegation, including the Minister of State (Petroleum) and Group Managing Director of the Nigerian National Petroleum Corporation, (NNPC), Dr. Ibe Kachikwu. On Tuesday, President Buhari would fly to Riyadh, Saudi Arabia’s capital, to hold talks with King Salman Bin Abdulaziz Al Saud and senior officials of the Kingdom of Saudi Arabia. A statement by the presidential spokesman, Mr. Femi Adesina, yesterday, stated: “Ongoing efforts by Nigeria and other members of the Organisation of Petroleum Exporting Countries, OPEC, to achieve greater stability in the price of crude oil exports are expected to be high on the agenda of discussions between President Buhari and the Saudi monarch. “Crude oil prices and market stability will also be on the front burner when President Buhari goes on to Doha, Qatar, on Saturday for talks on Sunday with the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani.” The statement said the President would also hold meetings with heads of international financial organisations and multilateral associations in Saudi Arabia and visit Medina and Mecca to pray for greater peace, prosperity and progress in Nigeria before going on to Doha. Saudi Arabia, Russia to freeze oil output Saudi Arabia and Russia have agreed to freeze oil output at near-record levels. While the deal is preliminary and doesn’t include Iran, it’s the first significant cooperation between OPEC and non-OPEC producers in 15 years and Saudi Arabia said it’s open to further action. Oil pared gains after the accord was announced, signalling traders see no immediate end to the global supply glut. The deal to fix production at January levels, which includes Qatar and Venezuela, is the “beginning of a process” that could require “other steps to stabilize and improve the market,” Saudi Oil Minister Ali Al-Naimi said in Doha. Tuesday after the talks with Russian Energy Minister Alexander Novak. Qatar and Venezuela also agreed to participate, he said. Saudi Arabia has resisted making any cuts in output to boost prices from a 12-year low, arguing that it would simply be losing market share unless its rivals also agreed to reduce supplies. Naimi’s comments may continue to feed speculation that the world’s biggest oil producers will take action to revive prices. “The reason we agreed to a potential freeze of production is simply the beginning of a process” over the next few months. “We don’t want significant gyrations in prices. We don’t want a reduction in supply. We want to meet demand. We want a stable oil price,” Naimi told reporters. More than a year since the Organization of Petroleum Exporting Countries decided not to cut production to boost prices, oil remains about 70 percent below its 2014 peak. Supply still exceeds demand and record global oil stockpiles continue to swell, potentially pushing prices below $20 a barrel before the rout is over, Goldman Sachs Group Inc. said last week. While Novak has said he could consider cuts if other countries joined in, Russia faces significant obstacles to doing so. Oil erased gains in London after rising before the meeting amid speculation the countries would discuss production cuts. Brent crude fell 3.6 percent to settle at $32.18 a barrel Tuesday in London, having earlier climbed as much as 6.5 percent

source: vanguard