Abuja — As crude oil price hovers close to $100 per barrel, the minister of petroleum resources, H. Odein Ajumogobia, has said that the rise in price of crude oil in the international market portends a great danger to the nation's economy.

The minister spoke yesterday in Abuja at the 2007 National Association of Petroleum Explorationists (NAPE) Conference and Exhibition.

But he did not give details of what danger he foresees. However, he said the Organisation of Petroleum Exporting Countries (OPEC) and other crude oil producing nations are taking precaution in identifying the trend in the very difficult scenario which the producers have never had before.

He said this would be the first time the price would rise steadily to such a level and that it poses great challenge to oil producers to curtail.

Nigeria, with about 35 million litres capacity consumption per day, and about 2.3 million barrels per day export capacity, relies heavily on fuel importation as a result of poor state of the nation's four refineries. Currently, daily consumption of fuel is being subsidised by federal government to the tune of over N15 billion weekly.

According to Ajumogobia, to lower the crude oil price in the market, Nigeria as a producing nation, must improve on its exploration and downstream investments.

In that direction, the government would continue to advocate development and investment in the sector, such as building new refineries, he said.

"Definitely, we will formulate policy that will drive the investment."

He said the federal government was considering third party finance option for oil and gas development in the country, adding that the government was committed to restructure the framework for funding the industry.

"We are looking at third finance option to ensure that we make necessary investment today to meet the demand of tomorrow. Gas is important and the new gas policy takes the central stage in term of monetization and utilisation."

He said Nigeria has the opportunity of being a significant helper in the oil and gas industry to the rest of the West African sub-region and the Gulf of Guinea. To achieve this, the minister noted that there must be rapid training and development of engineers, geologists and technicians.

Earlier, the out-going president of the association, Dr. Emmanuel Enu, said the nation's crude oil reserve was depleting due to low investment and high cost of drilling new wells.

"Deepwater rigs have become too difficult to come by and the development field has also become too capital intensive to cope with. This is therefore a threat to the future deepwater development."

Enu said very few operators that emerged winners in the recent bid round could boast of drilling the first wells within two years of awards.

"Those drilled only made technical successes with no meaningful discoveries. Some operators who do not understand the complexity of the geology of ultra- deepwater have just suddenly realised that they cannot fund the operations and that of drilling", he said.