*DJ Nigeria Advisor: OPEC Should Defend $50 Oil Basket
DJ Nigeria Advisor: OPEC Should Defend $50 Oil Basket
WASHINGTON (Dow Jones)--The Organization of Petroleum Exporting Countries should defend a $50 a barrel price for its oil basket, a top Nigerian oil official said Thursday.
Tony Chukwueke, head of Nigeria's department of petroleum resources and a top government advisor, told a conference that such a price is needed to pay for investment in capacity expansion.
"It looks like the world can take a shock but we have to ask what would happen if the price goes below $50... We don't want it to go to $40," Chukwueke said, noting the rising costs of steel and other commodities necessary to build energy infrastructure.
Chukwueke emphasized he was speaking for Nigeria, not for OPEC. Nigeria is one of OPEC's 11 member countries.
DJ Nigeria Advisor: OPEC Should Defend $50 Oil Basket -2
Saudi Oil Minister Ali Naimi has said repeatedly that his country, the world's largest crude oil exporter, doesn't have a target price. The market, not oil producers, determine prices, Naimi said.
"OPEC is discussing the price band today," Chukwueke said, referring to a joint ministerial session between the European Union and OPEC convened to discuss ways to stabilize oil markets. "We hope the oil price stops at $50. We will have to do everything we can so Nigeria plays its role in contributing to expand the reserve base."
Nigeria is embarking on an ambitious oil and gas expansion program aimed at attracting necessary foreign investment to develop the nation's vast reserves.
"We will not allow any of our reserves to be idle, especially at today's prices," he said. We don't want our partners to leave oil or gas in the ground."
OPEC President Sheikh Ahmad Al-Sabah has said the group won't move to cut back oil production at its Dec. 12 meeting in Kuwait.
OPEC said Thursday it pegged the value of its reference basket of 11 crude oils at $49.69/bbl Wednesday, the second day in a row the basket was below $50. |
