The Organization of Petroleum Countries, OPEC, is gradually recovering from its worst experience as a result of the global oil crisis, which cost members about $1 trillion loss since 2014, an official said.
The Secretary General of OPEC, Mohammed Barkindo, said in Abuja during his first member country visit to Nigeria that since the crisis, which followed the unprecedented drop in crude oil prices, member countries of the organisation experienced significant decline in their production capacities and output.
“Globally, this industry has lost nearly one trillion dollars in terms of deferred projects, outright cancellation of projects across the supply chain – upstream, midstream and downstream,” Mr. Barkindo said in his speech during his visit to the Minister of State for Petroleum Resources, Ibe Kachikwu.
“This (crisis) is the greatest threat that is facing future supply. We need consistent investment in order not only to maintain current production, but to take care of reserves that we produce as well as to secure the security of future supply.”
In terms of national revenues, he said since all OPEC countries’ economies were dependent on oil, they had lost cumulatively about $1 trillion to the drastic drop in crude oil prices since 2014.
However, the OPEC scribe said members have remained optimistic that their decision to curtail output to stabilize prices has started yielding fruitful results with prices nearing the $60 per barrel mark last week.
“With the joint decision we took under the Declaration of Cooperation on the 10th of December, cumulatively, we from OPEC withdrew about 1.2 million barrels per day, while the 11 non-OPEC withdrew nearly 600,000 bpd, altogether about 1.8 million bpd has been cut.
“And for the first month since January (when the decision took effect), I have just brought my report, our compliance level is over 90 per cent. Even within OPEC, we have never had 90 per cent. This is the first time. So, we remain optimistic that the worse is over for this cycle,” he said.
Mr. Barkindo said the challenge before the group now was how to solidify the platform of 24 members, pointing out that the signals they were getting from the non-OPEC side was highly positive, as they were willing to support efforts to achieve market stability.
“Those three historic decisions – the Algiers Accord, the Vienna Agreement of November 13, and the Declaration of Cooperation on December 10 in Vienna – has changed the energy landscape and has turned a historic page in oil.
“We are on the course of turning this industry out of the worse recession that we have entered to restore stability to the market, on a sustainable basis that will allow investment to come back on a continuous basis,” he stated.
Mr. Barkindo used the occasion to announce that as a result of the positive impact of OPEC in the effort to resolve the global crisis, fresh requests have been received from countries wishing to join the group, to continue to promote their common interest.
One of such new requests, he said, was Equatorial Guinea, an important producer in the Gulf of Guinea, which has already applied formally to join OPEC.
In his speech, Mr. Kachikwu noted the positive impact Mr. Barkindo has recorded in OPEC within the short period he has served as the Secretary General, saying this has justified the trust reposed in his candidature by President Muhammadu Buhari, who confirmed his nomination to the position.
The minister said the decision to support Mr. Barkindo to the office was because OPEC needed someone who not only was skilled and experienced, but one with the right intellectual depth and ability to think outside the box to find solutions to the problems of OPEC.
“With Barkindo taking over, we have all seen what he has done. He is the most fundamental face changing act of the management of OPEC in recent history, because what he did was not just helping us salvage the economies of all member countries, but giving OPEC a new face.
“OPEC had previously lost credibility and nobody was listening to it at strategic global meetings. They could almost predict that the organization never reached resolutions. But today, in all the output build-ups found in the US of reserves, nobody is looking at that in terms of pricing, but at what OPEC will decide,” Mr. Kachikwu said.