Sunday, May 22, 2005

Nigeria seeks to double oil exports

Nigeria, it is reported here, wants to grow its oil output but there are a few obstacles - including pirates and "ethnic militants":
The attractions of Nigerian oil are easy to see. It is largely sweet, light, low-sulphur crude -- which is easy to convert into petrol -- and lies near the shipping lanes to the fuel-hungry US and Brazil's emerging market.

But the industry has been plagued by Nigeria's unstable political scene.

Onshore wells in the swamps of the Niger Delta are often targeted by pirates and ethnic militants.

Total shut down its operations in the block known as Oil Mining Licence 57 in the western delta swamps near Warri on March 15 2003 after its tank farm there was destroyed in an attack that left five people dead. About 10 000 barrels per day in production have been lost.

ChevronTexaco's nearby wells have also been shut since March 2003 following the same ethnic violence. Several tens of millions of barrels in estimated reserves have lain untapped under Ogoniland since Shell quit the area following the controversial execution of minority rights activist Ken Saro-Wiwa in 1995.

Compared to such risks, the added engineering difficulties of working offshore become insignificant. Some offshore licences have also come with more favourable terms from the government, allowing firms to recoup their development costs over several years before sharing profits with the Nigerian state.

But the sense of security provided by the sea separating the rigs from the chaos and poverty of the delta may turn out to be false if Nigeria cannot learn to translate its oil wealth into greater well-being for its people, Nigerian and international officials warn.

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