OPEC chief calls for concerted effort to stabilize oil prices

OPEC chief calls for concerted effort to stabilize oil prices

Seoul (Platts)--5Jun2006

OPEC president Edmund Daukoru Monday called for a concerted effort by
both oil producing and consuming countries to stabilize oil markets, saying
that high crude prices did not benefit oil exporters.

Consuming countries needed to boost their downstream investment while
producers needed to expand their upstream capacity, Daukoru told a press
conference in Seoul, where he met with South Korean president RohMoo-Hyun.

"High prices do not benefit oil producers," he said, noting that high oil
prices damaged economic growth and reduced consumption. "I really can tell you
that we are concerned with high oil prices," he said,"because at a certain
psychological level alternative competing fuels would start to divert
investment that should have otherwise come into the oil sector."

Daukoru predicted that strong oil demand from China and India, tight
production capacity worldwide and continuing geopolitical uncertainties would
keep crude prices above $60/barrel. He also blamed the current high prices in
part on the activities of hedge funds. "At present there are hundreds of funds
that are said to invest money into oil and gas when in the past there were
only a few," he said.

Daukoru, who is Nigeria's oil minister, also said on a visit to Seoul,
that his country planned to increase its production by some 1.5 million b/d by
2007, according to South Korean officials. A spate of attacks on oil
facilities by militants in the Niger Delta has left more than 500,000 b/d of
crude production shut in, although rising production from some new fields has
partly offset the losses.

South Korean president RohMoo-Hyun, whose country imports almost all of
its crude needs, expressed concern to Daukoru about the trend of politicizing
natural resources and energy, his spokesman said.

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