The Minister of State for Petroleum, Dr. Ibe Kachikwu, has stated that the Organisation of Petroleum Exporting Countries (OPEC) will resist any deliberate action by shale producers to sabotage the oil market, ThisDay reports.
In their continuing efforts to stabilise the oil market, 14 OPEC member countries and 10 participating non-OPEC producing countries, led by Russia, extended their production adjustments, which originally started January 1, 2017, for a further period of nine months, beginning July 1, 2017.
Despite attempts by the cartel to reduce the excess inventory in the market to boost prices, Reuters reported that in the Permian Basin – the largest US oilfield – producers are pumping at the fastest rate in years, taking advantage of new technology, low costs and steady oil prices to reap profits at OPEC’s expense.
Though many OPEC members now appear to believe that shale has to be accommodated, there are indications that another fight is around the corner as Kachikwu has hinted that the cartel might review its strategies in the event of any sabotage by the shale producers.
“If we get to a point where we feel frustrated by a deliberate action of shale producers to just sabotage the market, OPEC will sit down again and look at what process it is we need to do,” Kachikwu said.