An oil and gas expert in Nigeria, Mr Bala Zakka, has urged the leadership of the Organisation of the Petroleum Exportation Countries to come up with a policy to ensure that crude oil price stays below $70 per barrel.
Zakka, in an interview with Financial Street in Lagos on Friday, warned that the continuous increase in crude oil price might boost the production of shale oil.
Shale oil is an unconventional oil produced from oil shale rock fragments by pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock into synthetic oil and gas. The oil is mostly found in the United States of America.
According to Zakka, when the price of crude oil gets so high, it will become attractive for producers of shale oil.
He said, “Once they (shale producers) start producing, they will flood the market and the prices will come down. So, while OPEC is allowing its member-countries to produce and make money, it will not allow them to tighten the production so that the prices will not increase because once it increases, owners of shale oil will go into production.
“And once that happens, the US will stop buying oil from OPEC member-countries.”
He said higher crude oil prices would enable shale producers to resume drilling campaigns.
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