OPEC recently revealed that Angola surpassed Nigeria to become Africa's largest producer of crude oil. For 50 years, Nigeria was the largest producer of crude oil, but production is now down by approximately 25-40%. Despite the growing global demand for crude oil, Nigeria's output continues to fall mainly due to frequently violent attacks on oil interests by militant groups like MEND who have 'advised' oil companies to "not waste their time repairing any lines, as [they] will continue to sabotage them".
Angola out-produced Nigeria by only 50,000 barrels per day (bpd) and financial analysts appear to be optimistic and predict that Nigeria will retake the top spot. However, I worry that continuing threats from MEND towards oil production installations and Angola's aggressive plans to increase their output puts the future of Nigeria's reign as Africa's 'King of Crude' in doubt. Only today, MEND announced that it will attack oil pipelines in Bayelsa State and encouraged companies like Daewoo Nigeria Ltd to leave.
THE COMING OIL SECTOR PROBE
The Federal Government is about to commence a probe of the nation's oil sector. If it turns out to be anything like the ongoing power sector probe, it could be explosive and reveal even more weaknesses in that sector. Adding to the wahala (problems) in the oil sector is the fact that the U.S. government announced that the Nigerian National Petroleum Corporation (NNPC) and an unnamed political party are guilty of receiving $6.3 million in bribes from an American company, Wilbros Group. The rot in Nigeria's oil sector is about to unveiled for the world to see and, it most likely will not be pretty.
THE DELTA CRISIS CONTINUES
By the time the probes begin, heads will hopefully be rolling, but will that solve the Niger Delta crisis which is the main reason why Nigeria's output has fallen and oil companies are cutting back production and jobs? Militants in the region continue to fan the flames of violence and insecurity. A Chevron vessel was recently hijacked by an 'unknown' group of armed militants and MEND has disavowed any knowledge of the act. As I mentioned recently, the federal government plans a Niger Delta Summit Steering Committee to discuss the means by which the crisis will be resolved. It was in June 2007 when Yar'Adua asked UN Secretary General Ban Ki Moon for United Nation's assistance in finding a remedy. Now the nation is waiting for Nigerian born Ibrahim Gambari to be reassigned form other UN assignments to head the Steering Committee.
But, I cannot help but think that the nation already knows what is needed to gain some headway in the Delta. Have we not held summits like this before? As one whose mother is from that region, I can say with confidence that the Niger Delta needs more schools, more hospitals, more roads, electricity, an end to the gas flaring that companies like Shell have been allowed by law to do. Peaceful mediation with armed groups, such as MEND, is needed. Such mediation must result in agreements that will require them to give up their weapons and turn their 'skills' towards protecting the people from armed individuals whose sole goal is to rob and steal from the populace, among other things. Nevertheless, I encourage continued communication between the federal government and the various interests/parties in the Delta.
The plans to build refineries in the Delta and Lagos State with the help of Romanian, Indian and Chinese companies will be a start in getting Nigeria back on track but no concrete progress will be made if we don't 'take care of home' first. Oil is the lifeblood of Nigeria upon which almost everything else depends and until the nation does what is right to empower, protect and care for the people of the Delta, and punish those that have looted the land at the expense of the people, we will continue to witness a reduction in oil revenue, jobs and our status as the King of African Crude.
UPDATE (05/22): It appears that Yar'Adua is not happy with the news that Angola has surpassed Nigeria to become the largest African producer of crude. According to Leadership newspaper, a senior official in the executive branch is quoted as stating,
"it is unfortunate that Angola a new entrant into the Organisation of Petroleum Exporting Countries (OPEC) has over taken the country in crude oil production as a result of avoidable circumstances".Yes, we all know that the reasons for Nigeria's decline are due to "avoidable circumstances" and as many of you have read from the insightful comments generated by this post, it is clear that the solutions to this development, though obviously complex, must be implemented immediately. Hopefully, Nigerians will discover more about our government's plans to not only effectively produce crude, but use the earnings from crude to diversify the economy and bring an end to the Niger Delta crisis. If you are yet to do so, please take a look at the comments and join in on the enlightening conversation about this matter.
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