Subscribe free to our newsletters via your
  Energy News  

Subscribe free to our newsletters via your

Analysis: Nigeria seeking reform for oil

The call for reform of the Nigerian oil sector comes at a time when the industry is faced with production far below the 2 million barrels per day mark, placing the industry second among African oil exporters behind Angola.
by Carmen Gentile
Washington DC (UPI) Feb 26, 2009
Nigerian leaders are promising to move ahead with planned efforts to reform the country's oil and gas sector despite the continuing violence plaguing the petroleum-rich Niger Delta.

Speaking to petroleum investors at a conference in Lagos, Nigerian Oil Minister Rilwanu Lukman said lawmakers are "working earnestly to ensure the key aspects of the reform program" will be passed as soon as possible, Nigerian news sources report.

The change that is perhaps most coveted by officials would allow the state-run Nigerian National Petroleum Corp. to solicit private funds for investments in joint ventures with foreign energy firms, ending the longstanding policy that required the NNPC to ask the federal government directly for capital.

"The reforms will see the NNPC as a profit-driven company that can raise cash from the capital markets, thereby strengthening the corporation to become a commercially viable entity," read an editorial Wednesday in the pages of a leading Nigerian newspaper, This Day.

Odein Ajumogobia, Nigeria's minister of state for petroleum resources, has been an ardent advocate of reform, saying it would spur new growth in a sector beset by violence and inefficacy, which has caused production to decline by 25 percent or more from a onetime high of 2.5 million barrels per day.

"We must improve the capacity of the industry to attract investments. We believe that deregulation would provide the required stimulus to move the industry forward," said Ajumogobia earlier this week.

The call for reform of the Nigerian oil sector comes at a time when the industry is faced with production far below the 2 million barrels per day mark, placing the industry second among African oil exporters behind Angola. With production estimated at 1.88 million bpd as recently as mid-January, oil output may have fallen even further, Nigerian energy officials said earlier this month.

Foreign oil executives at Royal Dutch Shell in Nigeria, the largest foreign petroleum operation in the country, have made similar claims regarding their fallen output since the onset of violence by militant groups such as the Movement for the Emancipation of the Niger Delta at the end of 2005.

Shell in February announced a force majeure, cutting oil exports from Nigeria because of increasing militant attacks on the country's oil installations and pipelines, just the latest of several work stoppages that have halted tens of thousands of barrels of oil production for the company over the last 12 months.

MEND and other militant groups say they are fighting for a more equitable distribution of the country's oil wealth. However, detractors criticize the group and others for using their professed advocacy as a cover for illegally siphoning oil from pipelines, a practice known as bunkering, and selling it on the international black market.

The ever-present violence and corruption in the delta have prompted some foreign oil operations to pull up stakes entirely and have made others question the viability of the operations there in the years to come.

Amid the violence hampering oil production, concerns reportedly are increasing among potential foreign investors regarding the sector, particularly the Nigerian government's recent cancellation of oil prospecting licenses granted to a South Korean consortium that paid up front for the right to explore on and offshore in the delta.

Whether the reforms proposed can assuage fears felt by some in investing in the volatile sector remains to be seen.

Share This Article With Planet Earth DiggDigg RedditReddit
YahooMyWebYahooMyWeb GoogleGoogle FacebookFacebook

Related Links
Powering The World in the 21st Century at

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

Analysis: Russia enters LNG market
Washington (UPI) Feb 25, 2009
As the world lurches deeper into recession, the energy markets, especially oil, have been hit by falling prices. As the world retools for a more austere 21st century, one energy source that will continue to rise in prominence is natural gas. For the first time, Russia, currently the world's leading producer of natural gas, is now poised to enter the liquefied natural gas market, opening an LNG facility in Sakhalin. For Europeans worried about Russia's reliability as an exporter following its pricing dispute with Ukraine earlier this year, the good news is that its first project is directed at the Asian market.

  • Oil Sensor For Continuous Engine Oil Monitoring
  • Smart Power Transformer Station
  • Analysis: Nigeria seeking reform for oil
  • Analysis: Russia enters LNG market

  • Jordan, Russia sign nuclear deal
  • Iran says nuclear plant could start in months
  • Toshiba wins US nuclear plant projects
  • Patience Pays Off With Methanol For Uranium Bioremediation

  • More Reasons To Hate Humidity
  • Scientist Models The Mysterious Travels Of Greenhouse Gas
  • Global Warming May Delay Recovery Of Stratospheric Ozone
  • Science In The Stratosphere

  • African Forests Out Of Balance
  • Chad fights charcoal in battle against creeping desert
  • Clinton, Indonesia need to act on climate: environmentalists
  • Study: Trees absorb one-fifth of CO2 gas

  • Natives in Russia's far east worry about vanishing fish
  • Vietnam battling hoof-and-mouth outbreak
  • Nutrient Pollution Chokes Marine And Freshwater Ecosystems
  • US milk company denies China products unsafe

  • Carbon emissions from freight can be cut: report
  • China's Chery Auto unveils electric car: company
  • Electric car charging stations power-up in San Francisco
  • Chinese auto maker plans to take on giants with electric cars

  • Top Chinese aircraft maker launches global recruitment drive
  • Swiss aircraft firm to cut jobs in Ireland
  • Major airlines call for climate deal to include aviation
  • Bank of China extends massive credit to state aircraft maker

  • Nuclear Power In Space - Part 2
  • Outside View: Nuclear future in space
  • Nuclear Power In Space

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2007 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement