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Ex-OPEC Chief Says Crude Oil Market Oversupplied

Nigeria's Oil Minister Maduabebe Edmund Daukoru listens to a speaker during the seventh International Oil and Gas Conference and Exhibition 'Petrotech-2007' listen toin New Delhi, 16 January 2007. Daukoru said that the crude oil market was oversupplied, but OPEC did not need to hold an emergency meeting on the issue as cuts were already planned for February. Photo courtesy AFP.
by Tripti Lahiri
New Delhi (AFP) Jan 16, 2007
Nigeria's energy minister said Tuesday that the crude oil market was oversupplied, but OPEC did not need to hold an emergency meeting on the issue as cuts were already planned for February. "The winter has been very mild. There is substantial oversupply in the market," said Maduabebe Edmund Daukoru, whose term as president of the Organisation of Petroleum Exporting Countries ended on January 1.

Daukoru was quoted by the Press Trust of India speaking on the sidelines of an oil and gas conference in New Delhi.

The Nigerian minister was replaced as OPEC head by United Arab Emirates oil minister Mohamed Bin Dhaen Al Hamli.

"There is new non-OPEC production expected to come on stream very soon. I suspect that is the reason why the market is so soft," Daukoru said.

Oil ministers from several OPEC countries, including Saudi Arabia and Iran, are in New Delhi for a major gathering of energy producers this week.

OPEC has an output cut of 500,000 barrels per day (bpd) due to start February 1 after a reduction of 1.2 million bpd in November as it tries to hold the line on prices which have fallen from record highs of 78 dollars in July to around 53 dollars.

Daukoru, whose country is the sixth-largest producer in OPEC, said the oil cartel was waiting to see how the February cut affected prices.

"We will simply wait it out. The sky is not falling because prices are at 52 dollars a barrel," he told reporters after a speech Tuesday afternoon.

He added that he could not say there would be no further cuts before the next formal OPEC meeting was scheduled, on March 15.

But he said oil price levels had a major impact on the willingness to search for new supplies and oil-consuming countries should also be concerned about low prices.

"If it falls much below current levels, it will jeopardise future development," Daukoru said. "The important thing for us is to get some certainty in demand," he said. "It's no use, if we talk with consumer institutions, for us to be urged to put more capacity in place -- at the same time those very countries are going for non-oil sources of energy, especially nuclear."

Last week, prices fell to levels last seen in June 2005 because of unusually warm winter temperatures both in the United States and Europe, which have stalled demand for heating oil.

The minister also spoke about "energy poverty" in Africa and other parts of the developing world, saying there was an urgent need to invest in production and distribution networks there.

"See a satellite view of the world at night and the stark contrast of the blackness of Africa surrounded by the radiance of every other country," Daukoru said.

He said 84 percent of Africans had no access to electricity and 89 percent burn biomass for cooking and heating, leading to the deforestation of the continent and adding to global warming.

"These nations are being left behind. We are losing our forests," he said.

The Nigerian minister said the OPEC Fund for International Development, the World Bank, the Asian Development Bank, the United Nations and aid agencies must work together to improve access to energy sources in the continent.

"We must declare a world energy decade comparable to the millennium development goals," said the minister, who was to meet later with India's petroleum minister Murli Deora.

Source: Agence France-Presse

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