Nigeria and It's Oil Issues

Oil sales comprise approximately 95% of the Federal Republic of Nigeria’s export earnings, accounting for approximately 80% of its government’s revenues. Nigeria has the tenth largest proven oil resources in the world, estimated to be about 35 billion barrels, and ranks eighth internationally among leading petroleum exporters.

Yet the West African nation only produces approximately 2.2 million barrels of oil per day, well below its capacity, and if anything its 130 million inhabitants are a lot worse off than they were in the 1970s before Nigeria joined the Organization of Petroleum Exporting Countries (OPEC.) Nigeria’s once prosperous agricultural sector has not kept up with its population growth and the nation is forced to import more food than it produces. Nigeria also imports the majority of its fuel. Its annual per-capita income of $1,400 is far below that of the world’s other oil producing nations, and even lower than several African nations that are not oil exporters.

What went wrong?

Nigeria does not have the infrastructure to optimize it’s oil riches. And Nigeria’s oil riches have become the basis for an internecine ethnic war.

Nigeria’s Oil Infrastructure

Of course logistical difficulties abound when oil is being extracted from an equatorial swamp – which describes most of the regions where Nigeria’s petroleum reserves are located. Most of the production facilities, refineries and other processing plants, and transportation facilities are terribly antiquated.

Nearly all of Nigeria's oil production and development projects are joint ventures between Nigeria’s government-owned Nigerian National Petroleum Corporation (NNPC) and various multinational corporations. These joint business ventures over the years have engaged in a number of dubious business practices including dredging canals without considering the canals’ impact on the environment, cleaning oil spills without cleaning up oil sites and paying off tribal chieftains for drilling rights. These companies have also shown a marked preference for hiring foreign rather than local workers to work the oil fields, generating fierce resentments that often culminate in acts of violent sabotage.

Political Instability

In the first nine months of 2000 the Nigerian government lost four billion dollars in potential oil revenues to vandalism, according to the NNPC. Two years later international oil companies ChevronTexaco, Shell Oil and TotalFinaElf suspended oil production in the Niger Delta region entirely due to fighting between Nigeria’s military and various ethnic tribal groups, particularly the Ogoni and the Ijaw, leading to an almost 40 percent reduction in Nigeria’s petroleum output in 2002. Since then unrest has continued despite the Nigerian government’s massive crackdown on militants which has resulted in the deaths of hundreds of Nigerians and the exodus of thousands more from their villages.

Nigeria’s oil issues first gained international attention in 1995 when activist and playwright Ken Saro-Wiwa was executed for creating one of Nigeria’s first large-scale protests, the Movement for the Survival of the Ogoni People, to demonstrate against Nigerian dictator General Sani Abacha’s economic and ecological exploitation of tribal lands. The United States and the European Union imposed sanctions against the Abacha regime following Saro-Wiwa’s death but the sanctions were lifted three years later the dictator’s death.

But these sanctions serve to emphasize one of the most troubling aspects of the relationship of the U.S. to Nigeria’s oil issues: U.S. drivers are the major consumer of Nigeria’s oil. Gasoline, unlike other high-demand consumer goods like a Vizio TV (www.youreviewelectronics.com/vizio-reviews/), has a complicated moral pedigree.

This is a Guest Post,

This article was contributed by Alyssa Jacobs, whom by day is an employee of www.YouReviewElectronics.com. This website provides information for people looking for their best options in terms of HDTV's by giving a detailed list of HDTV reviews (www.youreviewelectronics.com).
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