Oil prices are beyond control

Prevailing market realities indicate that crude oil prices have started moving beyond the control of oil producing countries even as rising petroleum products prices incapacitate fragile African economies.
Dr Edmund Daukoru, Minister of State for Petroleum Resources made the disclosure while speaking at the opening ceremony of the 18th World Petroleum Congress in Sandton Convention Centre, Johannesburg, South Africa said having been part of the just concluded round of OPEC meetings, it was clear to him that prevailing market realities were moving beyond the control of producing countries.
"The world must look towards gatherings such as this to proffer ideas that will restore stability to energy markets through co-operation between consumers and producers," he said.

Dr Daukoru said hosting the event in Africa was timely, especially at a time when global oil and gas markets have come under severe volatility, with oil prices surging beyond all forecasts. He said the development presented a timely opportunity for Africa to contribute its wealth of assets and experience towards forging a world consensus on the impact of energy prices on global economic development.
"It is worth noting that the threat of run-away oil products prices on even the major economies of the world, a signal that the fragile economies of Africa would be severely hit as to be unable to benefit from the recent round of debt forgiveness and even less likely to meet the Millennium Development Goals,” he said.

On the impact of shut in refining capacity in the United States of America, the minister said the impact might not be too much because the price of WTI and that of Brent which came close at one point to within one dollar per barrel had widened.
"The reason is that Brent and WTI have become regional benchmark. They are not internationally traded. Much of what is produced in the US is consumed in the US. Much of what is produced in the North Sea is consumed in Europe. So, they have become regional.”

“What happens in the WTI stream has impact locally. It doesn't have impact on other streams and since the event happened in the US, it did not affect Brent. Only WTI went up, thereby widening the disparity. The same goes for refining capacity.”
"It has global impact only in the sense that Nigeria traditionally imports both from Western Europe and the same time from the US. To that extent, the increase in products prices will affect us and I signalled already that they must do their own part as consumers if this is not to impact the fragile economies of Africa," he said.

Also speaking, President Thabo Mbeki of South Africa described the decision to grant Africa hosting right of the 18th Congress an important contribution to Africa's sustained effort to break out of the terrible grip of a global marginalisation and wide-spread Afro-pessimism.
Speaking earlier, Lindiwe Hendricks, the South African Energy Minister, said there was the need for energy resource diversification on the African continent and that a Pan African E&P Company might be established to ensure the establishment of this objective.

Also speaking, Dr Eivald Roren, President of the World Petroleum Council said the congress would engage in debates that would help Africa realise its goals and objectives in the oil and gas industry to the full benefits of the people.
Roren said the WPC offered Africa the chance to reflect seriously on pertinent issues of management of its hydrocarbon resources, the global challenge of energy supply, diversification of resource base, youth empowerment and the scourge of poverty in the midst of huge hydrocarbon potentials.

The WPC president also lamented the high incidence of lack of probity and accountability in the continent's oil and gas industry, noting that operators hardly disclose what they pay for the hydrocarbon resources exploited, while most African governments fail to volunteer information on the monies received as royalties and taxes from oil companies.