Nigeria proposes oil price meeting

Press, 3 August 1981, Page 9

Nigeria proposes oil price meeting

NZPA-Reuter Nicosia Nigeria has proposed a special O.P.E.C. meeting to try to avoid a worsening of the price and production conflict between Saudi Arabia

and other oil exporters, according to the “Middle East Economic Survey.” There was an increasing feeling among members of the Organisation of Petroleum Exporting Countries that the time had come for a compromise to stabilise the depressed oil market, the authoritative survey said. The conflict had reached a stage where, if it was not resolved quickly, it would threaten to undermine the entire foundation of the organisation. To try to avoid this, an extraordinary O.P.E.C. meet-

ing proposed by Nigeria was likely to be held about the middle of the month, either in Geneva or Vienna, M.E.E.S. said.

Up to now the majority’s stand had been to maintain the inviolability of existing official prices on political as much as economic grounds.

But the depressed world demand for. oil, combined with Saudi Arabia’s high output, was making such inroads into the markets of the higher-priced producers, notably in Africa, that it was feared that one of the affected producers might eventually be forced to reduce prices unilaterally.

This, M.E.E.S. said, would be an incomparably greater defeat for the oil exporters than a simple price com-

promise with Saudia Arabia. The weak point in the O.P.E.C. spectrum was Nigeria, whose production had dropped to 800,000 barrels a day from its usual 2.1 million barrels, and looked like falling further. According to observers, said M.E.E.S., a Nigerian reduction to 700,000 barrels a day could pose an intolerable problem for the populous, revenue-hungry country. It was significant, therefore, that Nigeria had proposed an extraordinary O.P.E.C. meeting. Saudi Arabia, the biggest oil exporter, has maintaned near-record exports at 10.3 million barrels a day at SUS 32 a barrel, O.P.E.C.’s lowest.

Other O.P.E.C. exporters charge up to SUS4O a barrel.