I’ve heard both sides of the argument about the future of Nigerian oil production.
On the one hand, it’s hailed as one of the few countries with a positive outlook. On the other, it’s cursed forever by the violent geopolitical environment.
Over the last few years, we’ve been a part of the latter group.
In fact, I’d sooner place my bets with Chavez and his nationalization than with the rebel violence that plagues Nigeria, and cringe whenever oil workers are kidnapped by MEND, a group that fights for the redistribution of Nigeria’s oil wealth.
Of course, toss in widespread corruption and the political leaders pocketing those oil revenues, are
Yesterday, things got worse for the African oil producer. Nigeria’s state-run oil company said it needs $6.6 billion to cover its debts and fund future oil exploration. In other words, the corporation has become insolvent.
With a population of 150 million people, the country is able to export most of its 2.2 million bpd production.
Who gets most of that oil?
During the first quarter of 2010, the U.S. imported approximately 962,000 barrels of oil per day from Nigeria. In April, 2010, U.S. oil imports from Nigeria topped 1.1 million barrels per day.
And just in case you’ve still got the BP spill on your mind, about 2,400 offshore oil spills have occurred since 2006. Over the last 50 years, the government estimates that more than 260,000 barrels of oil per year is spilled into the Niger Delta.
In light of Nigeria’s state-run oil company, are you really expecting Nigeria to increase output?
As if Mexico’s collapsing production wasn’t enough, finding an extra million barrels of oil per day isn’t going to come cheap.
It’s only a matter of time before it hits the fan.
Until next time,
Editor, Energy and Capital