OPEC producing countries like Nigeria and Venezuela have called for OPEC and non-OPEC countries to meet over the next steps to ensuring a practical and profitable market share from the rebound and to create alternate plans for revenue. As oil prices might have peaked this week but the falling prices have been a mainstay for the past year and a half.
The dwindling oil prices have greatly damaged the expected revenue of oil companies in Nigeria as revealed by their third quarter reports, with some of them declaring massive losses.
Nigeria’s top oil official used a panel at the World Economic Forum in Davos, Switzerland, to bluntly plead for an emergency meeting of the Organization of the Petroleum Exporting Countries. Other member states of OPEC, a cartel of some of the world’s biggest producers, have quietly lobbied for such a meeting for months, as reported by the Wall Street Journal.
Critics will say that Nigeria is not seizing necessary Joint Venture opportunities in the oil industry to bounce back from economic downturn. In a Nigerian petroleum joint venture, two or more oil companies enter into an agreement for joint development of jointly held oil prospecting licenses or oil mining leases (OMLs) and facilities. Each partner in the joint venture contributes to the costs and shares the benefits or losses of the operations in accordance with its proportionate equity interest in the venture.
OPEC, which controls more than one-third of the world’s crude oil supply, historically has used its production level to move prices up or down—typically up—in times of crisis. But over the past year, Saudi Arabia and Russia, the group’s largest producers by far, have abandoned that role, opting to pump record levels of crude oil in 2015 to maintain market share.
Economists don’t expect the two leading producers to make way for others anytime soon, as they continue to pump oil to preserve their market share.