The over two years of oil price crisis has cost the Organisation of the Petroleum Exporting Countries (OPEC) more than $1 trillion in losses and a decline of 26 per cent in industry-related investments.
Besides, with the unsteady developments in the growth of the global economy, there is a projection that the oil industry would record further contraction of about 22 per cent in investment this year.
OPEC Secretary-General, Sanusi Barkindo, disclosed this in Washington DC, at the ongoing International Monetary Fund (IMF)/World Bank Group meetings.
He said there was cautious optimism that the recent increase in oil price, which was pushed to $50 a barrel by the recent production cut by OPEC, would continue.
“As I have just mentioned in the plenary, the prospect for 2017 is also still looking bleak. So, for the first time in recent memory, we are not only having three consecutive years of depressed oil prices, we are also seeing contraction in capital investments, particularly in the upstream for three consecutive years.
“Now, this is a very serious development that is threatening future supply to the global community with its consequences on the fragile economies as you have heard from the IMF,” he said.
Barkindo noted that the decision to agree on a range of ceiling of 32.5 million barrels a day to 33 million barrels a day production was proactive and timely, adding that the objective was to restore stability in the market and address the issue of high inventories that was depressing prices.
“The sum total of that hopefully, would bring forward the rebalancing of the market so that we would be able to achieve some form of equilibrium in prices with impact on revenues to member countries, especially our country Nigeria that has suffered both from low prices and low production.
“IMF made a very holistic and very realistic assessment of the global economy- ‘too low growth for too long and benefiting very few.’”