The 2008 budget is already under threat even before it is passed. The Niger Delta crisis has continued to take its toll on the nation’s revenue as Shell Development Company of Nigeria (SPDC), Nigeria’s biggest oil producer, still records a production shut-in of about 200,000 barrels per day in the Western base. Fears are already being expressed that Nigeria is at risk of losing its reliability as a steady supplier of crude oil owing to the frequent shut-ins. The World Street Journal reported earlier in the week that anxiety over the latest Nigerian disruptions helped to push oil futures above $90 a barrel last week.Nigeria, world’s 6th biggest oil exporter and Africa’s largest oil producer, derives more than 90 per cent of its foreign exchange earnings from oil which forms the basis for national budget.
The current problems in the Niger Delta have halted Shell's oil supply. Nigeria is one of the world's largest oil suppliers, but they could be losing their reliability. They are producing significantly less oil than expected. Nigeria cannot afford to lose Shell; the revenue from oil makes up a large majority of the Nigerian government budget. Oil is the country's largest source of income and jobs, so millions of Nigerians would be devastated if Shell were to pull out of the country.
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