Nigerian oil sector being probed

Members of Nigeria's parliament have launched an investigation into the country's oil and gas business.

The probe aims to shed light on the impenetrable corruption that dogs the industry in the country.

It follows a similar probe into the power sector which revealed corrupt deals that have left Nigeria without reliable electricity supply.

Nigeria is currently the eighth biggest exporter of oil in the world, but most of its population remain poor.

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This article addresses the recent probing of Nigeria's oil sector in an attempt to discover any corruption that has manifested itself. This search is designed to reveal anyone that has made corrupt deals in Nigeria's oil industry, and if they are found out Nigeria's legitimacy will most likely be lowered considering most government officials are involved in the oil sector. If they are found to be corrupt, the citizens of Nigeria may question whether or not they have a right to lead their country.

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Another Oil Dealer Shot Dead in Ibadan

Another private petroleum dealer, Mr. Gbenga Taiwo, has been shot dead in Ibadan by two suspected assassins operating on motorcycle.

The killing came barely one month after the yet-to-be-solved murder of Mr. Demola Oyadeyi, also an oil dealer.

Sources told journalists that Taiwo, the Managing Director of Samalis Oil was shot dead around 10pm on Tuesday night at his residence in Oluyole Estate Extension, Aba Aladiye, Ibadan.

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This article addresses the recent murder of yet another oil dealer in Nigeria. Mr. Gbenga Taiwo was shot dead by two assassins; this murder comes follows the recent murder of Mr. Demola Oyadeyi, which has yet to be solved. Mr. Taiwo reportedly begged the assassins to spare his life and take everything he owned, but the assassins informed him his life had already been paid for. The assassins were reportedly being closely trailed by the police. This event shows the violent nature of many Nigerian people; also, the fact that these men would so quickly murder someone displays the corrupt nature of many of the Nigerian people which is reflected in the government.

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Nigeria Tracing Militant Pipeline

Nigerian oil officials are to start digging up an oil pipeline found at a militant's abandoned hideout to see if it runs to a refinery about 2km away.

The army claims the pipeline was used by Ateke Tom, the head of the Niger Delta Vigilantes, to steal oil.

A BBC reporter says the pipeline, found earlier this week, is visible for about 500m before disappearing underground.

Mr Tom is accused of being behind much of the lawless money-making schemes causing havoc in the oil-rich region.

He is wanted by the authorities for a string of bank robberies, incidents of piracy, stealing crude oil and kidnappings.

His present whereabouts is unclear, but contacted by the BBC by phone Mr Tom denied laying the pipeline to his former base near Okochiri about 20km-30km from the regional capital, Port Harcourt.

Instability and violence in the Niger Delta region over the past few years have led to a significant drop in Nigeria's oil exports.

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Ateke Tom, the head of the Niger Delta Vigilantes, has been stealing oil from a pipeline that runs near his former hideout. His group is the major cause of violence and terrorism in the Niger Delta region. He is wanted for stealing oil, kidnapping, and several bank robberies. His present whereabouts are unknown, but the government is searching for him. Capturing Ateke Tom for good could help put an end to some of the unrest in the Niger Delta region for good.

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Nigeria Rebel 'is alive and well'

A leading member of a Niger Delta oil rebel group has been confirmed as alive and well by members of his family.

The news comes over a week after Henry Okah's rebel group threatened "anarchy" in the Delta region unless his family and lawyers were given access to him.

Mr Okah, of the Movement for the Emancipation of the Niger Delta (Mend), was arrested in September.

The government last week revealed charges of treason against Mr Okah, who faces a death sentence.

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This article addresses the confirmation that a leading member of a Niger Delta oil rebel group is "alive and well." This comes after many feared that Okah had been killed, possibly by the government. Okah is being charged with treason and faces a death sentence. Okah has felt betrayed by the government because of agreements they had made previously. According to Okah's brother Charles, Mr. Okah did not seem to have been physically harmed while he was detained. The location of Okah and his friend, Edward Atatah, has remained unknown for the length of their detainment. Atatah is suffering from hallucinations and "acute hypertension" because of his detainment. The fact that this man has become mentally ill since he has been detained by the government alludes to the ill treatment that these men have been receiving.

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Nigeria parliament passes 2008 budget, spending up

Nigeria's National Assembly passed a final version of the 2008 budget on Wednesday that foresees a 21 percent hike in proposed expenditure and an even sharper increase on what the government actually spent last year.

The Senate and House of Representatives, which had passed slightly different versions of the budget last week, reconciled their figures and adopted the 2.89 trillion naira total spending proposed by the upper chamber.

The harmonised bill will now be sent to President Umaru Yar'Adua for final approval. He had originally proposed an annual spending figure of 2.45 trillion naira.

To increase the amount of money available to be spent in this year's budget, the lawmakers revised upwards the benchmark oil price to $59 per barrel from $53.83 in the executive's original bill.

The Senate had said the additional spending was "committed to the provision of water, roads, power, enhancement of social services such as education and healthcare delivery".

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Although the budjet has not been approved by Yar'Adua, a 20% increase in spending is quite signifigant. The addition is supposed to help provide more quality public goods and services, and the Nigerian people may appriciate the extra spending. Hopefully, this new budjet, and the higher oil prices from Nigeria do result in added stability and satisfaction with the Nigerian Government.

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Nigeria Made $55b from Oil Exports in 2007

Information made public by the United States (U.S.) government on earnings by members of the Organisation of Petroleum Exporting Countries (OPEC) for 2007 has placed Nigeria fourth on the ladder with a total income of $55 billion.

The amount, the report noted, did not translate into improved standards of living for the citizens as their plight remained deplorable with a mere $409 as per capita income.

With the figure, Nigeria emerged the fourth highest revenue earner among OPEC countries coming behind Saudi Arabia, which earned $189 billion, United Arab Emirates (UAE), which made $63 billion and Iran's $57 billion.

Although Nigeria featured prominently among the four leading nations in OPEC in terms of oil export revenues, the country lagged behind significantly in per capita distribution.

But the rise of the oil prices in the international market above $100 is being attributed to several factors such as the lingering crisis in the Niger Delta region.

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Though Nigeria produced the fourth most oil out of all of the OPEC countries, the per capita income of all of the OPEC countries is close to $400. Obviously the oil profits are going elsewhere. The oil prices will continue to rise for the remainder of the world due in part to the problems in the Niger Delta. This article further exemplified how oxymoronic the financial status of Nigeria is.

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Nigeria to build three gas plants

Gas Flaring

Nigeria plans to build three gas processing plants in the oil-rich Niger Delta and a grid of pipelines linking them to the rest of the country, a gas ministry official said Thursday.

He quoted junior gas minister Emmanuel Odesina as having said Wednesday the new plants will be built at Warri/Forcados, Akwa Ibom/Calabar and Obiafu areas of the delta.

Nigeria's junior petroleum minister, Odein Ajumogobia, has said the new gas infrastructure will cost between 15 billion and 20 billion dollars (10 billion to 14 billion euros) and that it should be put in place between 2012 and 2015.

Nigeria's reforms are aimed at enabling the country to satisfy domestic demand for gas and to reduce flaring.

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In an answer to the high demand and correspondingly high prices of gas in Nigeria, the country has decided to open three new gas plants. This simple economic solution may be the help solve the raging gas prices that citizens have gone so far as to strike over. The price and schedule of the action may offset the result for some time, but hopefully the Nigerian people should see a decrease in prices because of this.

Nigeria's Oil Export Suffers Setback

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.

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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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Nigeria Orders Shell to Stop Restructuring Amid Job Loss Fears

The Nigerian state-run oil company NNPC has ordered the Anglo-Dutch oil group Shell to suspend its restructuring amid fears it could lead to job losses, officials said Tuesday. Senior Nigerian industry officials quoted Nigerian National Petroleum Corporation boss Abubakar Yar'Adua as telling a parliamentary hearing on Monday that the NNPC, with which Shell had a joint venture partnership, was not consulted before Shell went ahead with the exercise.

"There are issues involved and must be resolved before anything," Yar'Adua said, but added that the NNPC appreciated the challenges facing Shell with production cut because of unrest in the Niger Delta.

Shell director Mutiu Sunmonu told the hearing the restructuring would have saved the company some 200 million dollars if allowed to go through, according to the NNPC officials. He said Shell took the decision to ensure "the future and survival of its business operations" in the oil-rich west African country.

He said a combination of factors, including the unrest in the Niger Delta, had led to a cut in Shell's daily production in recent months. Shell is Nigeria's largest operator, accounting for around half of the country's daily output of 2.6 million barrels at peak production, but the unrest in the restive Niger Delta has reduced the firm's production by some 500,000 bpd.

The company had said in a statement last November it was restructuring its Nigerian operation to promote efficiency, productivity and cut costs.

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Nigeria can not afford to allow Shell to lay off thousands of Nigerian workers. The decrease in production could be devastating for the already unsturdy Nigerian economy. While inceasing efficiency and cutting costs would be beneficial for Shell, the unemployment that it would cause would cost thousands of jobs, which is the last thing that Nigeria needs right now. Also, the recent oil pipeline breaks in the Niger Delta have further raised production costs.

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Yar'Adua lists new rules, no politics in projects location

ANY project to be executed by the Federal Government will henceforth not be determined strictly by political considerations, the Presidency has said.

In a directive to ministers and other senior government officials, President Umaru Musa Yar'Adua listed the new economic factors to determine the siting of any project as need, the number of people it will serve and the jobs it will create.

Consequently, the President has ordered that Lagos be given priority in the location of new refineries.

Yar'Adua particularly directed the affected officials to ensure that investors be encouraged to build refineries in the nation's former capital.

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This article addresses President Umaru Yar'Adua's recent decision that not only will political considerations be considered when placing an oil refinery but also economic factors will be considered. Some of these economic factors include "need, the number of people it will serve and the jobs it will create." Also, preference was given to Lagos in regard to the building of new refineries because Lagos consumes 55 percent of petroleum products. This article also addresses Yar'Adua's desire to halt imports of petroleum products to Nigeria and resume production in some of the refineries including the Warri Refinery. This shows the President's desire to make Nigeria be the most productive that it can be and rely on itself fully, rather than other nations to provide the products necessary to live.

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70,000 Barrels of Crude Oil Lost

The police have begun investigation into the disappearance of a ship laden with crude oil, reportedly diverted to Nigeria’s territorial waters.

A competent police source told the News Agency of Nigeria in Lagos that the ship, with more than 70,000 barrels of crude oil, was on a voyage from Panama to Tema Port in Ghana when it was diverted.

The source said that an order from the office of the Inspector-General of Police was being awaited before commencement of full investigation.

The Navy, however, said it was not aware of the missing vessel.

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While it was not the fault of anyone from Nigeria, this tanker incident has revealed many things about cross-organization in the Nigerian Government. The police in Nigeria were aware of the tanker, but the Navy was not. The department seemingly most suited to the investigation should be aware of the incident, but they are not.
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Government Cancels Incentives for Oil Firms

FOREIGN oil firms operating in Nigeria will henceforth not enjoy monetary incentives granted them by the Federal Government 22 years ago.


This followed the termination of all agreements on fiscal incentives given to the companies for the purpose of increasing oil and gas exploration. The Memoranda of Understanding (MOU) between the government and the oil multinationals were signed in 1986 to strengthen the beneficiaries following the crash in the international oil prices and the attendant reluctance of some of oil-producing companies to invest in oil and gas activities in the country.

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This article addresses recent decisions to remove incentives for Nigerian oil firms. These incentives were removed for various reasons, including evidence that the funds were being used in places other than their designated area. This removal is occuring in order to continue "on-going reforms in the industry" which shows evidence of Nigeria's modernization. The nation is attempting to better itself by making its various industries the best they can possibly be while still adjusting various mindsets in the nation, including the excessive amount of corruption that has consumed Nigeria for so long.


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Strike may Shut down Water and Electricity

As the nationwide strike enters its third day the NLC, TUC and the Joint Action forum (JAF) in a press release yesterday said water and electricity may be shut down.

"The Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) again commend the generality of the Nigeria people for observing the general strike. The level of compliance, mass support and participation has remained appreciable across the 36 states and the Federal Capital territory, in all sectors of the economy and in all spheres of life.

In particular, wecommend the peaceful conduct of workers and other members of the public during the strike, pickets and other protest activities in various parts of the Country.We also commend the manifest civility demonstrated by the Police in the
ongoing general strike/mass protests. This is a marked departure from the excessive high-handedness which Police had displayed in the past.

We also condemn the reported deployment of officers and men of the Army and Navy to operate fuel depots and other purely civil infrastructures for which they have no mandate. Over all, the NLC and TUC remain disappointed by the apparent indifference of the Federal Government to the popular wishes of the people by returning the price of petrol to N65 per litre."

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Nigeria's people have been very peaceful in their demand for lower oil prices, but the government has been unresponsive and has instated military replacements. The fact that a democracy such as Migeria does not listen to its citizens does not reflect well on their political tact.
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Militants Blackmail Nigerian Government

Militant groups in Nigeria’s Niger-Delta region are now demanding a payment of $3 million per any vandalised spot on the crude oil pipeline passing through the Chanomi creek channel before repair works should be carried out lest the efforts be frustrated aggressively.

It was gathered that there are about 23 vandalised spots on the pipeline and that the militants in the area are demanding the sum of $3 million per spot to be paid otherwise no repair work would be allowed to commence.

It was gathered that a contractor was granted access to the Chanomi Creek Channel in the first place because certain access fees were paid to the militants.

At a recently held oil and gas conference in the Nation’s capital city, Abuja, the immediate past boss of the state owned NNPC stated that he was having difficulties getting a contractor to go in and effect repairs on the pipeline in the Chanomi Creek channel.

Read more here. This story also directly relates to this one.

The fact that the Nigerian government is not able to fend of black mail like this and has fallen victim to similar schemes before does not bode well for its stability. This story reveals that freelance militant groups hald much power in Nigeria, and some hold more power than the government in some instances.
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Nigeria's Political Mess Will Keep Oil Prices Higher Than Ever

The state of political affairs in Africa’s most populated country has never been stable from the moment when Nigeria obtained sovereignty and became independent from Great Britain. The country was suffering from inter-tribal wars and conflicts between Muslims and Christians.

The military dictatorship that was set up in the country after the end of the British colonial ruling also failed to establish law and order in a large country. The oil business could only add more instability to the list of the above-mentioned problems.

Nigeria’s oil deposits are located in the delta of Niger, the home to a large and bellicose tribe called Ijaw. The tribe’s leaders claim their rights to own quite a big part of the oil profits. The military authorities of the country stand firmly against such an intention of the tribe: the illegal extraction and sales of fuel has become a lucrative business for them.

The governmental troops of Nigeria are waging war against the Movement for the Emancipation of the Niger Delta (MEND). The army and the police use brutal measures in their struggle when they burn Ijaw’s whole villages to the ground for intimidation. The company Royal Dutch Shell, which owns most of the local oil business, suffers the largest losses because of the war.

Rebels attack oil pipelines, tankers and take company’s employees hostage. The shipments of Nigerian oil have dropped by 20 percent since the beginning of the year because of the acts of sabotage. It is worthy of note that Nigeria is included in the top ten list of the world's largest oil suppliers.

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Due to the corruption of the government and oil industry of Nigeria, oil prices
will continue to rise for consumers. Though Nigeria is one of the top ten
countries in regard to total oil supply, beaurocratic corruption has prevented
Nigerian citizens and international oil consumers from profiting from the
abundance of oil.