The Price of Nigerian Oil
Nigeria is one of the world's richest oil and gas zones but is still held back by civil unrest. Fleur Doidge reports.
West African nation Nigeria is in the top ten largest oil and gas producers globally and is the largest oil producer in Africa. So it is no surprise that it regularly makes headlines. But as time goes on, this is increasingly for all the wrong reasons. The Nigerian National Petroleum Corporation (NNPC) – recently superseded by the National Petroleum Company of Nigeria – recently said an increasing amount of oil capacity is shut in – much of it due to disturbances such as pipeline vandalism or violent attacks on oil companies, including but not limited to staff kidnappings and even killings. If all shut-in oil capacity were to come back online, total potential production capacity is estimated to exceed three million barrels a day, with one million from offshore sources, including Shell’s shut-in 115,000bpd EA Platform. On 7 February, Shell shut in a further 130,000bpd, bringing the Nigerian shut-in total to one million barrels. Offshore sites exist in the Bight of Benin, Bight of Bonny and Gulf of Guinea, with major and lesser players from all over the world jostling for advantage and eyeing these risks – which are also holding back refineries and future development. “Deepwater projects may represent the future of Nigerian oil production by allowing multinational operators to avoid security risks inherent to the unstable Niger Delta region,” said state oil sources last year. Currently, a third of Nigerian oil production capacity is offshore, with 36.2 billion barrels of oil reserves as of January 2007, according to the US Energy Information Administration (EIA). Government has flagged plans to expand that to 40 billion barrels by 2010. Around 20% of the nation’s crude exports are destined for European markets. Oil exports reached an estimated 2.2 million barrels a day in 2006. Nigeria also had 182 trillion cubic feet of proven natural gas reserves as of January 2007. The government plans to raise earnings from natural gas exports to 50% of oil revenue by 2010 – costing an expected $15bn in private sector investments. But 40% of Nigeria’s annual natural gas production is flared, according to government sources. NIGERIA’S HISTORY WITH OIL
Oil was first found in Nigeria in 1956 by Shell-BP, with the first oil . . .
Read the full article