OPEC could hold an emergency meeting in the next two months if crude oil prices remain low, Nigerian oil minister Emmanuel Ibe Kachikwu said Tuesday.
“OPEC may hold an emergency meeting in the first quarter if prices remain at current levels”, the minister, who up until recently was OPEC’s sitting president, said at a conference in Abu Dhabi.
“I would anticipate that fairly quickly we would see an emergency round together” if global crude prices fall below $30/barrel, Kachikwu said at the Gulf Intelligence UAE Energy Forum.
“I certainly hope it doesn’t go below $30… the benchmark that we have was more in the $35 category,” said Kachikwu, commenting on the price threshold that OPEC leaders had in mind when they met in Vienna to discuss policy in December.
Brent crude futures are currently languishing below $35.
The group’s current Saudi-led policy aims to claw back market share from non-OPEC producers, in particular shale oil producers in the US.
Kachikwu said that coordination between OPEC and non- OPEC crude exporters would be essential for producers to bring balance back into today’s heavily over supplied markets, particularly because US shale oil producers are likely to be a long-term feature of the market.
“This was our view, from the African group (within OPEC).
The shale producers will be there, even if they disappear [for a period of time],” he explained.
With 65% of the market outside the hands of OPEC, without the non-OPEC producers around the table, the group’s impact would be limited, he said, adding that OPEC on its own had the potential to swing supplies only by around 1.5 million b/d at the moment.
OPEC’s last meeting on December 4, 2015, resulted in the removal of even a notional limit on output, as ministers failed to agree on a number.
A 30 million b/d production target had been in place since 2012.
Projections reviewed by OPEC members suggested that world crude supplies could fall by a further 1 million b/d in 2016, on top of 1.5 million b/d of expensive non-OPEC crude production that closed or was in the process of closing in 2015.
But prices have fallen faster than production rates since OPEC’s Vienna meeting, Kachikwu said.
While an emergency meeting for OPEC might be held soon, formal or informal coordination with non-OPEC exporters like Russia, Mexico or Azerbaijan seems unlikely, Kachikwu said.
“I don’t see that happening,” he said.
The minister was more bullish on the chances of OPEC members reining in their investment and production expansion plans. Asked about ambitions for big production hikes regularly attributed to Iraq, Iran, and other OPEC members, Kachikwu said coordination might prevail in future meetings.
“When you have too much madness in the room, you begin to look for some sanity. And that is what is going to happen,” said the minister, adding that global crude prices could be closer to $50/b by the end of 2016, as the impact of a lack of investment in conventional oil production in particular starts to be felt in the market.


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