The Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), Dr. Sanusi Barkindo, on Wednesday highlighted the role played by the Declaration of Cooperation (DoC), the group’s framework for supply stability, in halting an excess crude oil volume of 1.3 billion into the market in 2020.
This comes as the Speaker of the House of Representatives, Hon. Femi Gbajabiamila, assured stakeholders that the parliament will protect Nigeria’s interest in the long-awaited Petroleum Industry Bill (PIB), which it promised to pass into law in April.
Barkindo, who spoke at the S&P Global Platts Americas Petroleum and Energy Conference, added that last year, the oil and gas industry lost about 30 per cent of its capital expenditure in the upstream due to the global oil market crisis.
While enunciating the importance of multilateralism given the current realities in the industry, Barkindo, a former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), noted that the DoC brought together 23 oil-producing nations to stabilise the market.
He said as an example of multilateral approach, the OPEC’s declaration helped the industry to traverse two historic downturns and ushered in a new era in global energy cooperation.
Barkindo recalled that during the 2014-16 oil industry downturn, which resulted in the loss of half a million jobs and an estimated $1 trillion in investments frozen or deferred, the diligent and coordinated response through voluntary production adjustment decisions taken by the DoC helped to rebalance the market, restore stability and revive the industry.
He said: “I am sure each and every one of us can recall the dire situation the industry was in, which was most dramatically illustrated on 20 April 2020 when the price of WTI went negative. It was a visceral day, and one often described as ‘Black Monday.’
“It was a time when the industry faced a potential crude oversupply of nearly 1.3 billion barrels. There were even deep concerns that some storage hubs could actually reach tank tops.
“Thankfully, this never came to pass, in part due to the decisive actions of the DoC. Since then the DoC has shown great courage and flexibility and has adapted as and when necessary to changing market dynamics, particularly with the post-summer advent of second and third waves of COVID-19.”
According to him, the rising number of COVID-19 cases and attendant lockdowns are more reasons not to lose focus in ensuring market stability.
“We also realise our work is not done. We have our eyes firmly fixed on 2021. It is clear the recovery has been fragile and uncertainties remain, particularly in terms of the pandemic.
“Vaccines offer some much-needed light at the end of the tunnel, but the ever-increasing number of COVID-19 cases, and sadly the human loss as well as renewed lockdowns, are a harsh reminder of how delicate the situation remains,” he said.