The Federal Government will hold talks with Saudi Arabia, Iran and other oil producers by May, hoping to reach a deal on an output freeze at the next OPEC meeting in June, Ibe Kachikwu, Minister of Petroleum Resources, told Reuters.
A deal to stabilise oil output by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices.
“I will be doing a lot of shuttle diplomacy with the (president) … of OPEC to see how we can engage Saudi more, engage Iran more,” Kachikwu said in an interview late on Wednesday.
“We will be doing a lot of consultations before the June (OPEC) Vienna meeting,” he added.
“I hope we can get there,” Kachikwu said, when asked whether there was a chance of a freeze when the Organization of the Petroleum Exporting Countries holds its June meeting.
He said he hoped non-OPEC member Russia would support such an agreement, after Moscow said on Wednesday it was prepared to push output to new historic highs following threats made by Saudi Arabia to flood markets with more crude.
Nigeria, Africa’s top oil producer, has been at the forefront of attempts to agree a production freeze as it suffers from a slump in oil revenues.
Brent crude is trading at about $45 a barrel, down from levels as high as $115 hit in mid-2014.
Kachikwu said a failure in Vienna would encourage more producers to flood the market.
“Saudi, which produces 10.2 million (barrels per day) now, can go to 11.2 million. Russia is doing about 10.5 million and has the capacity of about 12 million so if everybody opens up … there will be much more surplus,” he said.
Iran has refused to participate in any freezing of production levels as Tehran wants to ramp up output after years of Western sanctions. “Iran is pumping more and there will be more if others take a cue,” he said.
The focus of Nigeria’s shuttle diplomacy would be to convince Saudi Arabia and its arch foe Iran to agree on a deal.
“We need to get them realising that both parties can exist in this organisation happily and look at common interest,” Kachikwu said.
He added that Nigeria’s oil production would remain below 2 million bpd due to the closure of a Shell pipeline after an attack by unknown gunmen. Repairs are expected to last until June.
“My intention was to produce over and above 2.2 million (bpd) this year and be able to hit 2.5 million,” Kachikwu said, adding that any extra production would go to local refineries, not exports.