The Organization of Petroleum Exporting Countries may meet to assess the impact of the nuclear crisis in Japan and the ongoing unrest in the Middle East and North Africa on oil supply, Nigeria’s foreign minister said Wednesday.
“It Japan is likely to affect the oil market and therefore the prices,” Henry Odein Ajumogobia told reporters after a meeting with Indian officials in Delhi. “I do suspect members of OPEC would be getting together to assess the situation of demand and supply.”
Crude futures dropped earlier this week due to fears of an increase in radiation levels in Japan, which is working to control a nuclear crisis after being hit by an earthquake and a tsunami.
Japan, the world’s third-largest oil consumer, is likely to require an increase in fuel oil imports to generate electricity in the long-term as a quarter of its nuclear power plants have been taken offline.
Responding to a question on the political crisis in North Africa, Mr. Ajumogobia said OPEC will take into account the impact of the trouble while reviewing any increase in oil supplies.
“If OPEC ceilings are increased then our production will increase by the same token,” Mr. Ajumogobia said.
Tensions escalated in the Middle East Tuesday as Bahrain declared a state of emergency a day after Arab Gulf states, including Saudi Arabia, rushed in troops in an attempt to stifle a growing anti-government uprising.
“We are working hard to expand our capacity, and it is important to have excess capacity for any sort of eventuality,” Mr. Ajumogobia said.
Nigeria plans to increase its crude oil output capacity to 4 million barrels a day from 2.5 million barrels. It plans to expand its crude oil reserves to 40 billion barrels from about 33 billion now, but Mr. Ajumogobia didn’t give a timeline for the expansion.
He said Nigeria won’t raise its oil production levels unilaterally, but will wait for OPEC’s directions.
India has already invested about $5 billion in Nigeria and oil sector reforms are expected to attract more investments in downstream and upstream businesses, Mr. Ajumogobia said.
He said at least one consortium of Indian companies has recently expressed interest in acquiring Royal Dutch Shell Plc’s oil blocks in Nigeria.
Shell is close to selling four of its onshore blocks to oil producers eager to snap up Western oil majors’ properties as unrest in the Middle East boosts global crude prices.
