Nigeria is a Mess and Getting Worse
Posted by Dave Cohen on February 19, 2006 - 4:00pm
First, for some background. Almost of all of Nigeria's cuurent production of about 2.6/mbpd comes from the onshore Niger Delta region shown here.
Click to Enlarge
Let's look at some basic supply and export numbers first. From the EIA Nigeria Country Brief
Most importantly, as recently as November of 2005, Nigeria was the 4th largest crude oil exporter to the US--1.163/mbpd.
Oil and Gas Journal (1/1/05) estimates Nigeria's proven oil reserved at 35.2 billion barrels. The Nigerian government plans to expand its proven reserves to 40 billion barrels by 2010. The majority of reserves are found along the country's coastal Niger River Delta, with the majority of the oil located in approximately 250 small (i.e., less than 50 million barrels each) fields. At least 200 other fields contain undisclosed reserves.Are these kinds of projections realistic at all given the escalating violence and civil unrest there?Nigeria is the largest oil producer in Africa and the eleventh largest in the world, averaging 2.5 million barrels per day (bbl/d) in 2004. In August 2004, Nigeria's finance minister announced plans to produce 2.6 million bbl/d of oil in 2005. The Nigerian government plans to increase oil production to 3 million bb/d in 2006 and 4 million bbl/d in 2010.
Problems in Nigeria
The causes of unrest in the Niger Delta region are not hard to understand. But a good place to start is with Nigeria's president Olusegun Obasanjo.
Good Friends — President Bush and Nigeria's
President Olusegun Obasanjo
From the Christian Science Monitor article — "Yet Shell and other oil companies pay the government royalties and taxes that amounted to a whopping $27 billion in 2004. This is one of the world's most corrupt countries, however, and much of the oil money disappears into personal accounts of officials" — naturally, the corruption starts at the top.
Needless to say, the ethnic groups living in the Niger Delta itself do not benefit from any of this oil revenue and thus large scale oil production stands side by side with great poverty in the region.
Next to an impoverished settlement of mud houses and rusted zinc roofs lies the Utorogu oil facility run by Royal Dutch Shell in Nigeria's oil-rich Niger Delta. As a giant tongue of flame leaps repeatedly in the wind - making a ferocious hissing sound as its fire feeds on disused natural gas from a pipeline - local women keep a respectable distance to dry their cassava flakes in its heat.There has also been substantial environmental damage in the region including natural gas flaring, ruptured pipelines and other accidents."The opportunity to dry our farm produce by this fire is the only benefit we derive from having oil in our land," said Reivu Umukoro, a 38-year-old mother of four among the women.
According to Umukoro, while oil workers who run the Shell facility and Nigerian troops who guard them live in air-conditioned comfort, the Utorogu community nearby manages without electricity, potable water, and health amenities.
On July 21, 2005, the pipeline that runs near here ruptured. Streams of black goo oozed into farmers' fields and a fishing creek. Because of a complicated dispute between villagers and the major oil company in this region, Royal Dutch Shell, the oil hasn't been cleaned up. Black residue still covers thousands of plants.The levels of violence are now increasing rapidly. As much as (or more than) 100/kbpd are either shut-in due to attacks on oil facilities or pipelines. The EIA has estimated that in 2004 139/kbpd of production were being disrupted on a daily basis due to attacks on oil facilities or sabotage. For example, the EIA states that "in December 2004, SPDC and ChevronTexaco suspended Nigerian oil exports of 134,000 bbl/d due to unrest in the Niger Delta. In January 2005, ChevronTexaco announced that it was losing 140,000 bbl/d of oil due to the closure of facilities in the Niger Delta". In other cases the oil is just bunkered (stolen) by militant groups to support their activities and buy weapons.Residents are angry. "We will face Shell," says village chairman Daniel Oweh surrounded by agitated young men. "The next stage will be violent."
One important player — no doubt, a self-serving African chieftain and despot on the rise — is
Alhaji Dokubo-Asari (shown at right) 
a prominent member of the Niger Delta Ijaw ethnic group and militant head of the Niger Delta People's Volunteer Force (NDPVF). In fact, after President Obasanjo threw him in jail last September, one of the four MEND demands after kidnapping the oil workers recently was for his release. Alhaji Dokubo-Asari seeks to create a new country in the Niger Delta, taking the oil money with it.
The situation in the Niger Delta is so chaotic and unstable that it is impossible to do it justice in a short post. However, in August of 2005 NPR's Steve Inskeep "traveled to Nigeria for two weeks to see firsthand a country of increasing importance to America's oil-driven economy". It is a series of 7 reports examining various aspects of the problem entitled Oil Money Divides Nigeria. Only partial transcripts are available online but there are complete audio segments for each story available at the cited link. So if you are interested in learning more and have a broadband connection, I highly recommend that you listen to these stories. You will hear unbelievable stuff about the precarious nature of the situation there.
Violence, sabotage and kidnapping are now a daily occurrence in the Niger Delta. Oil company operations are almost all heavily fortified and protected by Nigerian army troops. The situation is a mess and getting worse. And the latest news is ominous. From the The poverty of oil wealth in Nigeria's delta link cited above, we learn
"This release [of the kidnapped oil workers] does not signify a ceasefire or softening of our position to destroy the oil export capability of the Nigerian government," MEND said in an email to reporters. The group said it soon would launch fresh attacks aimed at cutting Nigeria's exports by 30 per cent in February. It warned all foreign oil workers to leave as new hostages taken by the group would not be freed....And although we have the usual assurances from President Obasanjo that all will be well,An expert security study commissioned by Shell two years ago fingered illegal sale of crude oil as the major source of funds for illegal weapons now awash in the region. An average of 1,000 lives are being lost in the region every year due to militia violence, the report said, predicting that at the current pace of violence Shell may be forced to abandon all onshore oil production in Nigeria by 2008.
What remains is to see how the government plans to pacify the armed militants, who have vowed that oil will no longer flow without their consent, and have mastery of the delta's maze of rivers and creeks so far impenetrable to the military.Nigeria may not be in the same league as Saudi Arabia or Russia but it is a very important exporter to both the US and Europe and is counted on to increase exports in the future. As reported in the CS Monitor article, David Goldwyn, a former US assistant energy secretary who now consults in the region says, "the loss of more Nigerian oil could send the price to $80 or $95 per barrel or higher.... The likelihood of a significant disruption always has to be counted as relatively high". If MEND makes good on its promise to reduce Nigerian exports by 30% in the near future, that will have a significant affect in the US and other importers of Nigerian oil.
To put this in perspective, the 4 other largest oil exporters to the US are Canada, Mexico, Saudi Arabia and Venezuela. Mexico seems to be about to tip over into permanent declines (given Cantarell), Hugo Chavez has shown some inclination to sell his oil to China instead, Saudi Arabia has the usual uncertainties we're all familiar with and in Canada, production is flat despite the over-hyped promise of tar sands from Alberta. So, Nigeria is looking pretty important in the overall scheme of things in the near term. And the way things look now, the likelihood of a significant disruption of oil exports from Nigeria must be taken very seriously indeed in 2006.
(Original introduction has been moved down here...tied to the news of that day...)
Things are not looking good in Nigeria (also pointed out by Leanan):
Armed militants carried out a wave of attacks across Nigeria's troubled Niger delta on Saturday, blowing up oil and gas pipelines and seizing nine foreign oil workers.[editor's note, by Prof. Goose] Originally posted 2/3.
Earlier this week, Nymex LS crude prices for March delivery surpassed $68/barrel mostly over concerns about Iran. But that was not the only reason. In Behind rising oil cost: Nigeria, the Christian Science Monitor reported that —
Unrest in the country's oil-rich delta region helped to drive crude prices this week to $66 a barrel...
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Perhaps we should get a betting pool going on how long before we start hearing that Nigeria is amassing WMD's. Somebody give Colin Powell a call and tell him to sharpen his pencils so he can draw more pretty pictures for the UN.
http://www2.spr.doe.gov/DIR/SilverStream/Pages/pgDailyInventoryReportViewDOE_new.html
I mean, come on. We are already losing production due to depletion in our own county and in most of our "hemispheric" suppliers (Mexico, and Venuzuela). Now add Nigeria and then we haven't even got to hurricane season, a stepped up Iraq insurgency (or heck even a continued lack of investment and repair) taking out even more iraqi crude. And then we cavalierly assume some surgical strike WONT have oil reprecussions (or minor ones). McCain's insane comment to the effect that some higher prices might have to be paid to see that Iran does not go nuc-you-lar.
How high??
It's one thing to try and grab resources when there are other spare resources for others to grab. But when you are already in the hole and experiencing a minor oil crisis, why make it worse, much worse. Anybody consider that maybe the best laid plans of this administration just might not turn out how we like they expected??
Is anybody considering the whole picture?
Profiting off a dieing System-think Enron.
And war-"The Bush administration has said it is planning to spend $120bn (�68bn) on the Iraq and Afghanistan wars this year, bringing their total cost so far to $440bn.The spending request, which will soon be presented to Congress, marks a 20% increase over last year, despite plans to draw down US troop levels in both war zones in the coming months.
And-
THE GUERRILLA OIL CARTEL
The control over the price of oil is now in the hands of global guerrillas.
And notice how you'll never hear Al Qaeda and oil/oil infrastructure
in the same sentence? If Al Qaeda's not a Secret Service construct,
how come Al Qaeda didn't crash those planes into the Houston Ship
Channel? Or if say Bunfield/London was caused by a crashing plane, would
a government talk about it?
Terrorist control of the oil price could be negated with a meaningfull energy reduction program. Why not spend the 440 B giving credits towards hybred cars for anyone recycling a SUV or other guzzler. The Army could buy them up, transport them to Iraq and rent them to the high paid USA contractors. They could afford to fill them up there with that cheap Halliburton Brand gas.
Problem solved.
http://www.washingtonpost.com/wp-dyn/articles/A35138-2005Mar14.html
Apparently they're buying fuel somewhere in Turkey for less than $100,000 and then charge a staggering 27,000,000 to transport it to Iraq. True, I haven't been able to find out the kind of fuel or what volume was purchased that would require such a high transportation fee, but if I take the 27million and assume a super high transportation cost of 25cents/gal that gives me a minimum volume of 108 million gallons of fuel. Then that figures the price/gallon is 0.00075 or 75 cents FOR A 1000 GAL (I want some of that!) and you still need about 8000 trucks to move it. Logistics problem. Highly improbable numbers in any case.
Maybe they air freighted it in with 500 KC-111s with fighter escorts.
http://www.energycommission.org/ewebeditpro/items/O82F6801.pdf
If I were a leader in Russia, say, or another country (or group) arguably not primarily motivated by benign good will towards the U.S., and, say, still reeling somewhat by a generation's war experience in Afghanistan (or other perceived historical U.S. aggression or competitive threat), wouldn't I be tempted to support groups like MEND by way of rendering the U.S. weaker?
Is it not happening, I wonder? Have I simply missed reporting on it, or is it happening but not getting reported, or is it taboo because we'd hate to give someone the idea if by some chance it hadn't occurred to them? Oops. Or maybe we wouldn't like raised the idea that U.S. aggressions might spawn future such paybacks?
African oil-rentier states make those in the Mid-East look like Norway. Nothing short of completely dictating how their economies are run will change anything. Look at Chad and its run-in with the World Bank.
And the poor people - if you stoppes buying the countries oil - they would have even less than the nothing they have now. Maybe you have a solution.
Ever heard of Ken Saro-Wiwe? I don't even think Nigeria makes the list of countries the US has a problem with.
My lord,
We all stand before history. I am a man of peace, of ideas. Appalled by the denigrating poverty of my people who live on a richly endowed land, distressed by their political marginalization and economic strangulation, angered by the devastation of their land, their ultimate heritage, anxious to preserve their right to life and to a decent living, and determined to usher to this country as a whole a fair and just democratic system which protects everyone and every ethnic group and gives us all a valid claim to human civilization, I have devoted my intellectual and material resources, my very life, to a cause in which I have total belief and from which I cannot be blackmailed or intimidated.
I have no doubt at all about the ultimate success of my cause, no matter the trials and tribulations which I and those who believe with me may encounter on our journey. Nor imprisonment nor death can stop our ultimate victory.
I repeat that we all stand before history. I and my colleagues are not the only ones on trial. Shell is here on trial and it is as well that it is represented by counsel said to be holding a watching brief.
The Company has, indeed, ducked this particular trial, but its day will surely come and the lessons learnt here may prove useful to it for there is no doubt in my mind that the ecological war that the Company has waged in the Delta will be called to question sooner than later and the crimes of that war be duly punished. The crime of the Company's dirty wars against the Ogoni people will also be punished.
On trial also is the Nigerian nation, its present rulers and those who assist them. Any nation which can do to the weak and disadvantaged what the Nigerian nation has done to the Ogoni, loses a claim to independence and to freedom from outside influence.
I am not one of those who shy away from protesting injustice and oppression, arguing that they are expected in a military regime. The military do not act alone. They are supported by a gaggle of politicians, lawyers, academics and businessmen, all of them hiding under the claim that they are only doing their duty, men and women too afraid to wash their pants of urine. ...
As we subscribe to the sub-normal and accept double standards, as we lie and cheat openly, as we protect injustice and oppression, we empty our classrooms, denigrate our hospitals, fill our stomachs with hunger and elect to make ourselves the slaves of those who ascribe to higher standards, pursue the truth, and honor justice, freedom, and hard work.
I predict that the scene here will be played and replayed by generations yet unborn. Some have already cast themselves in the role of villains, some are tragic victims, some still have a chance to redeem themselves. The choice is for each individual. I predict that the denouement of the riddle of the Niger delta will soon come. The agenda is being set at this trial. Whether the peaceful ways I have favored will prevail depends on what the oppressor decides, what signals it sends out to the waiting public.
In my innocence of the false charges I face here, in my utter conviction, I call upon the Ogoni people, the peoples of the Niger delta, and the oppressed ethnic minorities of Nigeria to stand up now and fight fearlessly and peacefully for their rights.
History is on their side. God is on their side. For the Holy Quran says in Sura 42, verse 41: "All those that fight when oppressed incur no guilt, but Allah shall punish the oppressor." Come the day.
--Kenule Beeson Saro-Wiwa
It appears that the "denouement of the riddle of the Niger delta ... " is soon upon us
Recall that Nigeria is the highest populated nation in Africa and in the 1970's was racked by civil war between the dominate ethnic group and the Christian Ibo's.
By the way, not everything in life/world is about oil. Close though.
Methinks Shell made a big mistake, not helping the locals directly while they could. They might have made a big difference with a relatively small investment.
There is no hope whatsover for Nigeria at this point. Conditions are so bad that neither Russia nor China would get involved (especially after the bad experiences the Soviet Union had when it messed around in Africa a few decades ago).
Nigeria is a horror movie that is going to go on and on and get worse and worse. In its future is far more genocide, rapid increase in death rates from multiple causes, and an increased flow of oil money overseas. Unless you have a magic wand to stop the movie, there is nothing constructive you can do except to help your Nigerian friends to escape the country. As individuals, many Nigerians are wonderful people, but they know what is happening; however, given the power of the kleptocrats who rule the country there is nothing the citizenry can do except to riot occasionally to express their despair.
Nigeria is not Congo, for instance, where over 3 million people have died in the last 10 years and there truly is no government in most of the country. So the situation could get much worse; the flip side is that while making things much better for Nigeria may be too much to hope for in the short term, there could easily be things we could do to prevent it from getting worse. Not all of those things even have to involve oil.
The militants have zero reason to believe any promises made by BP, Shell or other corporations. They have zero reason to believe any promises made by their own government. They are desperate and rightly so. Violence is going to follow. About the only thing that Shell or BP could do ethically and still retain some hope of getting back into the country later to pump oil at a subsequent time is to abandon ship now and state that the reason is the corruption of the Nigerian government. But that means foregoing all the current oil profits and modern corporations are not structured to give a damn about ethics, just profit. Hence, BP and Shell will be there til they are driven out by force, and then BP and Shell will use political money to buy an existing administration (this one or the next, regardless of party) to rescue them from their self-imposed stupidity.
Thus I agree with Don Sailorman and Oil CEO in this case - it's going to get worse. Yes, those corporations could do something to alleviate the poverty, etc., but they probably won't. Altruism is not in their perceived 90 day bottom line interest, even if it would be in their interest 5 years down the line.
You guys seem to think the problem is corruption at the top, or that "regime change" would bring a better government to power. It is not, and it would not. Government corruption in the form of self-enrichment by senior politicians never held back any country from development -- look at Asia. Also, Nigeria's stability is extremely fragile, and any attempt at "regime change" or similar nonsense would result in an explosion of anomie that would make Iraq look like a picnic. Probably, the country will split up soon, anyway. The only thing preventing it from doing so is that the North wants to stay to enjoy the off-shore oil revenue.
The key difference between Asia and Central America/Africa/Eastern Europe is that in Asia they first built their economy and then they got corruption. In the other countries they are trying to do the opposite, quite unsuccessfully so far.
Today, they are second only to Norway, with it's oil riches, as being the richest nation in Europe.
A stunning reversal in a single lifetime.
How did they do it ?
Several factors, high literacy (the epic novel of the 1930s has a poor sheep farmer who ate only one meal in the spring but wrote extremely complex poetry), exiting Danish colonialism (although they still keep several Icelandic national treasures), winning two "Cod Wars" against the Royal Navy and then superb fisheries management, democratic traditions, infrastructure investments but also an extreme lack of corruption.
A Minister took $6,000 worth of surplus materials (leftover lumber & concrete) from the State Opera for his farm. He got two years (served 18 months) in prison.
Of the 117 nations surveyed (mentioned on this thread) Iceland has the lowest level of corruption (New Zealand tied for #2).
There is no doubt in my mind that corruption is a tax upon the economy and society that slows development in myriad different ways. Often it is not what is stolen, but what is ruined by lack of confidence in the gov't.
Steal from schools, the children and later society suffer from a lack educated workers and leaders. Because funds for schools are stolen, people are reluctant to spend money on schools. Education. and later society, suffers even more.
In my experience corruption acts as a cancer to the society, not only the economy. It is not only the burdens and expenses with paying to somebody, it is utterly demoralizing. In a corrupted country people lose faith they can get a decent living being honest and start practicing "small-scale corruption" everywhere, even in their personal lives. The results are totally devastating - nobody wants to work, at work people shirk, bosses tend to apply negative motivation etc. I can talk about the resulting picture for hours so I'd better stop :)
Regardless, smells like a proxy war to me.
It's hard to see how any non-kleptocrat could come to power in Nigeria, with or without external support. One might be hard pushed to find many non-kleptocrats at any level of the political system or state employ. Oil just exacerbates the endemic problems and wealth disparity, is probably more a curse than blessing.
As to regime change I would ask to what and with what objective? The likelihood of ensconcing a stable regime of any kind which fostered sufficient security to permit the exploitation of its oil is probably so minimal as to be foolish. In the long term the break up of Nigeria, which is a huge and diverse country in both area and population, may be in the best interests of those wishing to exploit its oil reserves, if just to simplify the problem. I'm not aware that any external countries are currently embarked on that road, would be interested if anyone knows otherwise.
However, I disagree on the amount to which corruption - of a degree measurable only on a logarithmic scale - is seen as inevitable, barring external factors, vis a vis oil; especially if corruption's "specific gravity" is lowered by way of making certain those who don't cannibalize the public good, aren't rewarded for their conscience with possible starvation.
In these days when an ounce sympathy could be worth mega-barrels, informed sympathy might finally be the shrewdest investment ...
... and the ghost of Lord Kitchener may finally rest in peace.
Here's a snipped from that article:
From this State Department report Role of West Africa in our Energy Security from July of 2004.
http://images.google.com/imgres?imgurl=http://www.foei.org/climate/images/nigeriashellflare.jpg& imgrefurl=http://www.foei.org/climate/nigeriajustice.html&h=330&w=500&sz=18&tbnid=pZ muoO3nNSXQ-M:&tbnh=83&tbnw=127&hl=en&start=4&prev=/images%3Fq%3Dnigeria%2Bgas%2B flares%26svnum%3D10%26hl%3Den%26lr%3D%26safe%3Doff%26rls%3DGGLD,GGLD:2005-06,GGLD:en%26sa%3DN
http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID=2006-02-04T110314Z_01_IS L8109_RTRUKOC_0_UK-PAKISTAN-VIOLENCE.xml&archived=False
When you look at Crude&Condensate(exclude NGL's)Nigeria is even more significant than the OGJ article indicates.
Based on averages for 11 months of 2005 Nigeria is the 8th largest producer and will have displaced Norway for 7th spot in the last couple of months unless lost production in Nigeria has exceeded declinein Norway.
In contrast to the finance ministers statements production increases year on year seem to be getting smaller not larger due to the problems highlighted in Daves post.
Another problem for US supply is the fact that the UK provided an average of 400,000 bpd of crude and product to the US to end of Nov 05 but also that year became a net oil importer. Don't see how this can continue. What did US do - threaten a run on Sterling?
In addition how much longer will it make sense for Canada to supply US with 2.139 million bpd of crude and product whilst importing 1.2 million bpd from around the world (predominantly Europe).
What the hell is in that FTA?
North Sea oil is very light, high quality oil with high gasoline yields. It would not make sense to use this valuable oil for low quality applications (bunker oil for ships & power plants, asphalt/bitumen). So UK exports the good stuff and imports the low quality stuff.
Cars in the EU are going towards diesel, trucking is a larger transporter of goods there than US, so the EU needs more diesel in their mix, the US more gasoline.
UK may be a new oil importer by volume, bur perhaps not by value (yet).
The IEA, if you dig deep enough, has posted by-laws that if the world production drops by 5%, has 'demand-restraint' bylaws for its 100+ member countries of 4 day workweek, curfews, odd-even driving days depending on liscence plate etc - ironically (and not surprisingly) there is a footnote on the US policy sub-IEA (I cant seem to find it but Ive read it) that says somethig to the effect that since the US has 120 days of SPR instead of the mandatory 90 days, that we are exempt from the demand restraint rules - and that 'research' had shown that demand restraint was too destabilizing for the US economy. I kid thee not...
He could probably ask for and get $400,000 tomorrow.
After it pays for a prosthetic limb, reconstructive surgery, and rehab, you might even have some spending money left over.
Such a deal!
"They" are thinking about it now.
He's not the nicest guy in the world (unreconstructed Africaner who boasts of what he has done), but if you want to know what is going on in the world, it helps to listen to some unpleasant people who know things.
If just all Nigeria's exports are stopped the price could spike to $100 then settle back to around $75.
Interesting that IEA snippet of yours, one could reasonably assume that governments have taken note of this IEA guidance. Amusing and probably correct the US comment, maybe sinister in that one could read into it: other countries would be expected to curtail consumption so the US need not. Perhaps a tacit recognition of military and political reality? I would like to see the 'research' though I would be surprised if it is easily available.
their country and stash it in international
banks.
These should be named and shamed. They are
accessories to theft and terrorism.
Recall that Idi Amin, a monster in the Hitler, Stalin, and Pol Pot league ended his days in wealth and honor and a surfeit of sex not long ago . . . . in the land of our great friend and ally and oil supplier . . . where else? Saudi Arabia.
The Nigerian government is not corrupt---it is deeply, deeply corrupted. By whom? I was a Peace Corps Volunteer there in the early 60s. It was deeply corrupted then. My students knew that, but said they would change things. Alas, not yet. Like someone here joked, I'll know they are starting to succeed when we here about WMDs and the threat Nigeria represents to Western civilization.
Speaking of corruption, there is a table at:
http://www.infoplease.com/ipa/A0781359.html
It lists in 2005 Nigeria just above Haiti and sixth from the bottom out of 156 nation states.
And which U.S. states are least corrupt?
Most corrupt ?
City, certainly San Diego ranks. Three mayors in three weeks, US Congressman to jail. (Perhaps if we have a severe earthquake in SD, relief will be sent first to the D voting areas that did not elect such corrupt politicans, and any one from R voting areas that tries to walk to the D pickup areas will be chased back with police gunfire until all of the D's are safely evacuated).
States - New Jersey and Arkansas. Louisiana no longer ramks due to some honest politicans we have elected recently. No longer do bumper stickers say "Vote for the Crook, It's Important" to keep out David Duke.
Last governor was not that bright, but quite honest. Current governor is honest, but her husband is not. Nagin is quite honest, almost extremely so (when nephew was to be arrested on sting, they asked him about it. He said treat him like everyone else. Don't point him out during "perp walk" or tell media immediately that he is my nephew). True reformer, although he was "running out of steam" before Katrina.
New Orleans School Board & our US Congressman were last major bastions of corruption.
Some years earlier, I was painting my aunt's house in Greenwich. She told me she had tried to change trash service, but the guy had made it really clear to her that was a bad idea. The decision had already been made, if you know what I mean. She told me this because the guy from the gardening service wanted to know who the hell I was, painting her house. I guess I wasn't in the club.
I wonder if Australia might not take a tumble on this years list after the Australian Wheat Board and Oil for Food Programme scandal.
Like the Bush Administration our govt is very good at saying it didn't know simply because it didn't WANT to know.
BHP is also involved.
Of course, like many of the problems in the developing world, there is bloody history of neocolonial occupation, imperialism, war, and of course corruption, but there is even more at play. It's as if Africa is being raped of its resources yet again (let's not even speak of proposed jatropha and palm oil plantations to supply Europe's thirst for biodiesel). The environmental damage wrought by Royal Dutch Shell's operations are immense, so much so that they've destroyed many of the local industries such as fishing and farming. I speak almost weekly with a friend in Port Harcourt, and he assures me the situation is much worse, and much more complex than what is presented in the MSM. Let's not forget there are people and families struggling in all of this. I can only imagine how bad it'll be after any global peak is recognized.
There is one big difference between hell and Nigeria.
Hell is fictional.
"Riyah ain't Hell, but we can see it from here."
56ºC (132.8ºF) IN THE SHADE!
Now, it remains in permanent unstable tension between North and South: the mainly Christian South has all the oil, while the Muslim North has most of the guns.
Most of West Africa is split this way, and the Ivory Coast problem is of a similar nature.
20 years ago I still remember a helicopter, joy-ridding the co execs down the pipeline, comes over my block valve station. It hovers over the only plainly visible bamboo house within 1 km of the area, with the freshly washed laundry hanging outside, of a family that I'd been trying to "pacify" since construction began. It completely filled the house to the rafters with a dust tornado and nearly wound up just blowing it away, not to mention that the laundry looked like the cows dragged it around for a week. Its like they're just not satisfied with only killing the fish. I worked that station for another 2 weeks, we closed it when the new river crossing opened. 1 week after that, "guerillas" blew up the station.
This is not good. To be honest I don't see much hope for Africa, not just Nigeria. They have too much disease, too many children, not enough arable land, not to mention all of the problems coming out of colonialism. Random boundaries, ethnic groups being split and thrown together, traditional power stuctures destroyed, new ones not arising to take their place.
"Things fall apart, the center cannot hold"
Total receives first shipment from NLNG train 4
Total says that its first cargo of Liquefied Natural Gas (LNG) from Nigeria LNG (NLNG) train 4 left Bonny Island bound for Spain, as part of the 1.15 million metric tons per annum (MTPA) sales and purchase agreement signed between Total Gas & Power Ltd. and NLNG to off take LNG from trains 4, 5 and 6.
NLNG's Train 4 started production in fourth quarter 2005 and Train 5 is currently being prepared to start in February. These two trains will increase
NLNG's production capacity by 8 MTPA to over 17 MTPA. Train 6, currently under construction, will further increase the plant capacity by 4 MTPA.
Total holds a 15% stake in NLNG, a Nigerian Joint Venture company whose other shareholders are the Nigerian National Petroleum Corporation (49%), Shell (25.6%) and ENI (10.4%)
My handle reflects who I am. I also worked in the E&P sector over there for a decade, I am in America now, not flipping burgers, but working on issues and in roles that allow me to "see" things very well. I believe I know this country (USofA) also very well so, I think I have a good perspective to comment. Will post more on specific comments I have seen here when I get some time, or if I see any more truly wild assed "Nigeria or Africa has no hope" crap without any data backup or real understanding of history. Bottom line is, yes Nigeria and most of Africa is down today and many places have truly serious problems but people making silly prognostications on the basis of single point data of "today" in history don't understand the how history truly works.
Using the same $40 per barrel figure and 2.5mbpd - Nigeria, with a population of 129,000,000 would generate only $283 per person per year. Nigeria has per capita GDP of $1000.
With all due respect, there is as much knowledge on this site(or lack thereof) regarding Nigeria as any other country. If somebody is getting something wrong, please point that out and offer a correction. Please don't insult us by saying we don't understand how history "truly" works without providing the slightest bit of evidence that you do.
I hope it's not as bad as it feels, if there is any way I might be of help please say. I'm sorry to have spoken in public like this but I had to speak, I mean no criticism and speak as friend.
Same sad story. Now if Chad were as big a producer and exporter as Nigeria is ... sorry, the implications are not the same at this point.
The focus on Nigeria this weekend is because MEND is blowing shit up in the Niger Delta and have already reduced that country's production 20%. I expect we may see the same in Chad sometime in the future....
I agree about Dilbert but that strip gets lots of attention. Certainly more than Nigeria and much more than Chad. I didn't make the world, but I have to live in it.
Hang in there, OilCEO.
More and more oil is going to be coming from these rinky-dink places as the price of crude rises to the point where it becomes economically feasible. At that is where the implication is important.
ExxonMobil, Chevron, and others spent $4 Billion on this pipeline and I'm assuming other infrastructure with the understanding that the World Bank would back the deal by financing Chad's side of the deal. Now the World Bank is pulling out.
So where does that leave the IOC's? We often remark here about how the Giant Oil Companies are the bad-guys and aren't doing this and that the way we would like them to, but here is evidence that they are engaging in extremely risky investments in really sketchy parts of the world to bring us the black gold that we crave so much.
Then you have the World Bank, run by, yes, Paul Wolfowitz, or "Wolfy" as I believe Maureen Dowd likes to call him - everybody's favorite neocon. But one would have to admit, Wolfowitz is doing the morally admirable thing here.
Of course, now that everyone, thanks to Dilbert knows what fungible means, if the Western Majors pull out and write off their $4B plus all the lost revenue from pumping that oil for the next 25 years - we know that the Chinese will just step in - not caring one ounce for the people.
Of course, I don't know what will happen in this case, but I do know that it is a common sentiment in the oil industry that you cut all kinds of deals with these countries, but then as soon as the oil starts flowing and the money starts rolling in, these corrupt goverments force "re-negotiation."
Operating in that environment is so complicated and difficult, we as citizens, and moral beings sometimes don't even want to face the issue of Africa. But these oil companies do it everyday.
Why do you stoop to the folly of disguised ad hominem attacks? Your comments on Oil CEO are nothing more than veiled versions of the old fallacies trotted out by rabid Freudians (not by Freud himself) to the effect that: "You poor thing, you disagree with me because of your neurosis/defense mechnisms/unresolved Oedipal conflicts."
No matter how disguised, an ad hominem attack is just that--and utterly fallacious.
On a trivial point, I majored in psychology in the mid 1970s and have the misfortune of being well acquainted with Freud's work and that of his self appointed apostles. I fundamentally disagree with a large portion of his and their thesis and I would never make use of it in any way.
I'm interested in why you perceived and reacted to my comments above so and would like to explore it. If you are willing and can hold to your previous perception I'd be grateful if you could say. Probably better in private, there's an email addy on my profile now, and I give you absolute assurance that I will not reveal anything you say to anyone without your explicit consent.
It seems Nigeria is rather irritated with our Western arrogance in realation to his country/continent, and who can really blame him given the history of Western intervention in Africa? Increasingly we omnipotent and omniscient Westerners are going to be asking ourselves the question, "Why do they hate us?" in realation to the rest of the world. I think they hate us for what we do, not who we are. Unfortunately it appears that this distinction is becoming blurred as our actions/interventions, are increasingly becoming who we are
I don't know who this remark is directed at.
The Nigerian government is a big part of the problem. As my original post on this subject made clear, the Ijaw ethnic groups of the Niger Delta are getting screwed. I obviously can't speak for everybody who commented on this thread, but I have a lot of sympathy for the people blowing stuff up. But since TOD is a discussion of peak oil and Nigeria is an important producer and exporter, we need to take note of such a serious and understandable development--and not necessarily take sides. That is optional.How do you know that?
Does anybody know the true population of Nigeria to the closest 10 million?
Does anybody know when the last accurate census was?
Does anybody have a solid knowledge of the death rate, accurate to within 2 percentage points? If so, how was this data obtained?
As suggested in the recent remake of "King Kong," we should all reread Conrad's "Heart of Darkness."
Made me wonder if Africa will be better off after peak oil, if global trade collapses. Or will there be ethanol plantations there, instead of coffee and cacao plantations?
To Agric: Can't remember exactly how I stumbled here. Could have been yahoo (not google), because they have a blog search engine. Maybe when I typed "Nigeria" in the news search.
I am vaugely familiar with peak oil discussions. I take it y'all take the view that there will be some big coming crunch or something like that as oil dries up. Personally, I take the view of most economists on this issue. In brief: price increases as oil "dries up" will lead to adjustments of energy production and demand, the sky will not fall as a result. There will be short term pain of course, and perhaps that is the usefulness of the various peak oil fora and advocates (Mr. Simmons is the most prominent one I am aware of), they alert to the short term problems (which they mistakenly think of as long term) and the system gets ready for longer term solutions.
Re: Can Nigerians join? I will let whoever has interest find this place on the internet. You may already have others who did not identify themselves, we are quite loquacious, Nigerians are. My own personal foray here is limited and based on a specific whim. I don't want to go around recommending stuff to people, especially as I don't really have fire in my belly for the overall raison d'etre of the blog.
You, My Dear Nigerian, fell for the bait. Good to see you back.
You post may not have 'taken', there seemed to be a few glitches last week and a couple of my posts failed. It's a very rare occurance here, I'd guess its only happened to 3 of my posts in the last 6 months.
I respect you not encouraging others to come here, that's fine, though it is always useful having people with current first hand knowledge commenting.
If you don't know much about peak oil I'd suggest the following links for a relatively brief but good introduction:
http://energybulletin.net/primer.php
http://en.wikipedia.org/wiki/Peak_oil
http://www.eclipsenow.org/
I should point out that if one strictly is interested in peak oil, whatever happens or does not happen in Nigeria probably does not change anything in anyway. The amount of oil in the ground in Nigeria will not change. Temporary production hiccups will have negigilbe impact on the day of reckoning.
And, actually, in one of those beauties about the way the world is organized, your best source of information on how much oil there is in west Africa probably is available at one or both of the large Texas University systems. These data were donated by U.S. oil companies to Texas Universities (A&M or UT, I am not now sure), Obtained by a smart Texas wildcatter, these data became gold. Gene Van Dyke is now a billionaire http://www.vancoenergy.com/aboutus/history.htm
If all Nigerian exports suddenly ceased it would cause an immediate global shortfall of production verses demand, it's about as significant as Iran in that context - perhaps more significant to the US since it's the 4th largest exporter to the US. Also a good deal of nigerian oil is high quality, light, sweet. That type is easier to refine into gasoline and global production of it has already peaked in 2004.
Thanks for the Vanco link, I've heard quite a bit about their exploration activities but had not yet checked them out.