NIGERIA: GON SAYS OPEC UNLIKELY TO CUT

S E C R E T ABUJA 000753

SIPDIS


STATE PASS AF/W, NEA - DAS CROCKER


E.O. 12958: DECL: 04/23/20013
TAGS: PREL ECON EPET NI IZ
SUBJECT: NIGERIA: GON SAYS OPEC UNLIKELY TO CUT
PRODUCTION


REF: STATE 101320


Classified by Ambassador Howard F. Jeter for reason
1.5 (b) and (d).



1. (S) On April 22, Ambassador Jeter delivered reftel
demarche to President Obasanjo's Special Advisor on
Petroleum Affairs and Energy Rilwanu Lukman. Lukman,
who is leading Nigeria's delegation to the April 24
OPEC meeting in Vienna and was OPEC General Secretary
for ten years, said the normally conservative OPEC
would be unlikely to cut production until the
situation in Iraq is more clear. Lukman cautioned,
however, it would not take much additional oil to
oversupply the market, and OPEC wants to maintain a
price of $22 to $28 dollars.



2. (U) Lukman said Iraq would likely take 9 to 12
months to return production to its pre-Operation Iraqi
Freedom quota of 2.5 million barrels/day, and it would
be more than two years before Iraq produces oil at its
pre-Gulf War level of 3.1 million barrels/day. He
told local press on April 23, "If Iraq doesn't come
back immediately, as I expect it will not, then we
have to continue to supply the market. We don't want
the price to go too high." He added, "we have to
anticipate when Iraq is likely to come back and
prepare accordingly. We will find out what the
Americans are doing, how soon they will have a new
government in place, and, more importantly, how soon
it will take them to rehabilitate their
infrastructure."


JETER