FUNDAMENTALMENTE ENERGIA » Nigeria

Stability in Niger Delta is Key to Nigerian Oil and Gas Wealth

Ali Shakhtur — Sat, 17 Apr 2010 17:21:34 +0000

The key to Nigeria’s economic progress is stability in the Niger River Delta, where the bulk of the country’s oil and natural gas is produced and where a smoldering militancy and sabotage of production facilities threaten progress for the region’s 30 million residents, energy experts say.David Goldwyn, the State Department’s coordinator for international energy affairs, told an April 13 panel discussion sponsored by the Center for Strategic and International Studies that the Obama administration is “strongly committed to helping Nigeria with its problems” and “will bring the resources of the U.S. government” to bear in areas such as expanding electricity use to create jobs and bring economic benefits to the delta.

Nigeria is important to U.S. policymakers, Goldwyn said: Secretary of State Hillary Rodham Clinton visited in August 2009; President Obama met with Nigeria’s acting president, Goodluck Jonathan, on April 11; Assistant Secretary of State for African Affairs Johnnie Carson has visited a number of times; and the U.S.-Nigeria Binational Commission was launched April 6.

All these efforts, the U.S. official told the panel, are meant “to bring all the parts of our government together to work with Nigeria as partners on solving some of the core problems facing the nation.” But “the lead … on strategies and plans … will come from the acting president and his Cabinet.”

The panel discussion was also attended by Oronto Douglas, a human rights lawyer and Niger Delta activist who co-founded Africa’s foremost environmental movement, Environmental Rights Action/Friends of the Earth Nigeria, and who has advised the Nigerian government on strategic issues of community and the environment. Former U.S. Assistant Secretary of State for African Affairs Herman Cohen was also in attendance.

Thijs Jurgens, Royal Dutch Shell’s senior adviser in government relations for Europe and sub-Saharan Africa, told the panel Nigeria is a country blessed with abundant energy resources. He said it is the world’s 11th largest oil producer and seventh largest holder of natural gas, accounting for 75 percent of the Nigerian government’s revenues.

But, since 2005, production has been significantly cut, Jurgens said, with more than $50 billion lost, much of it revenue to the Nigerian government, through theft, called bunkering, and sabotage by militant groups claiming the region has been environmentally devastated by oil companies without receiving a fair share of revenues.

After negotiating principally with the Movement for the Emancipation of the Niger Delta (MEND), the Nigerian government announced an amnesty late in 2009 that has had some success in getting militants to hand over their arms, but violence continues in the region.

Jonathan, who was in Washington attending the Nuclear Security Summit, told a gathering sponsored by the Atlantic Council that the delta amnesty program consisted of two important phases, disarmament and rehabilitation. “We are progressing” in both areas, he said, with a goal of “retraining and creating opportunities” for ex-militants.

Source: www.allafrica.com

Gazprom and Nigeria Agree to Form Oil Joint Venture

Ali Shakhtur — Thu, 25 Jun 2009 01:00:02 +0000

Russia’s Gazprom and Nigeria’s state-run oil company NNPC on Wednesday agreed to invest at least $2.5 billion in a new joint venture to explore and develop Africa’s biggest oil and gas sector.
The new company Nigaz, a 50/50 joint venture between the two energy companies, aims to build refineries, pipelines and gas power stations throughout Nigeria.
“We have a chance to become major energy partners,” Russian President Dmitry Medvedev told reporters after meeting with Nigerian President Umaru Yar’Adua in the capital Abuja.
“If we carry out all our plans, Russian investment in Nigeria can reach billions of dollars.”
Nigeria has the world’s seventh-largest proven gas reserves. The Gazprom deal could strengthen Russia’s position as a supplier of natural gas to North America and Europe.
Some industry experts in Europe see Russia’s keen interest in the West African country as an attempt to get a stranglehold on Europe’s natural gas supplies.
Despite Nigeria’s vast gas reserves it has been unable to develop its gas industry anywhere near full potential because of a lack of funds and regulation.
DOMESTIC FIRST
Nigeria says foreign oil companies, like Gazprom, must first help build the OPEC member’s gas infrastructure before it can begin to make plans to export the natural resource.
“We will take part in building the first segment of gas pipeline from southwestern Nigeria northwards,” said Boris Ivanov, head of Gazprom International AO. “If Trans Saharan pipeline is realised, it will be its first segment.”
The Trans Saharan project, with capital costs estimated at $10 billion for the pipeline and $3 billion for gathering centres, would send up to 30 billion cubic metres a year of gas to Europe via a 4,128 km (2,580 mile) pipeline from Nigeria via Niger and Algeria.
The European Union, which relies on Russia for about 40 percent of its gas and a third of its oil, has viewed the project as a way of diversifying its energy supplies.
Ivanov said Nigaz also planned to bid for two of three biggest Nigerian gas exploration projects, which could amount to more than 2.3 trillion cubic metres.
FUNDING CONCERNS
Analysts raised concerns about how NNPC will be able to fund its share of the $2.5 billion joint venture, considering its poor track record with other foreign oil companies.
U.S. oil company Exxon Mobil, Royal Dutch Shell and French energy group Total have all had to provide billions of dollars in bridge financing to NNPC to plug funding gaps in their respective joint venture companies.
“We have seen in the last few years on specific field developments, the Nigerian side has had difficulty in making its own contributions,” said Manouchehr Takin, an analyst at the Centre for Global Energy Studies in London.
“The question I have is: ‘Is the NNPC financially strong enough to do a joint venture?’” he added.
President Yar’Adua sent parliament an energy reform bill last August that restructures NNPC into a profit-driven company, which supporters believe will resolve the funding problems. It was unclear whether the legislation had enough political support to pass parliament. (Additional reporting by Michael Kahn in London; Writing by Randy Fabi; Editing by David Gregorio)

Dubai Invertirá US$16 Billones en Nigeria

Ali Shakhtur — Fri, 23 Jan 2009 10:00:02 +0000

Y siguen las grandes inversiones de los emiratos, ahora Dubai anuncia esta cuantiosa inversión en Nigeria fundamentalmente para desarrollar el negocio de exploración y producción de petróleo y gas (english).

(from article written by Spencer Swartz) Dubai will invest most of the $16 billion planned in an infrastructure deal with Nigeria to develop oil and natural-gas drilling projects and the dilapidated power sector in the West African country, an official with Nigeria’s state petroleum company said Monday.

The deal, signed last week, many details of which have still to be hammered out, could be a boon to the impoverished West African nation where past and present governments have long been unable to meet the population’s basic development needs, such as reliable electricity supplies.

The planned decadelong investment comes at a time when tumbling crude prices are putting stress on Nigeria’s oil-dependent economy and signals willingness by the Dubai government to seek investment deals further afield as Gulf opportunities dry up amid the global financial meltdown.

An official with the Nigerian National Petroleum Co. said the deal involved Dubai Natural Resources World teaming up with the state-run NNPC to bankroll new oil- and gas-drilling projects and build at least 1,000 megawatts of gas-fired power generation.

“This would be across-the-board energy-infrastructure projects. Dubai wants to help us do things that others [international oil companies] haven’t been willing to do,” the official said.

While Dubia would invest most of the money, Nigeria too could pony up some funds to contribute, he said.

Dubai Natural Resources World, a unit of state-owned investment company Dubai World, confirmed the agreement in a statement over the weekend.

The deal also envisages building new pipelines to distribute gas to areas cited for planned industrial activity and possible investment in liquefied natural-gas facilities, the official said.

But there are a host of uncertainties in the deal, including how Dubai will finance its planned investments. Militant violence also continues unabated in Nigeria’s main oil- and gas-producing region, which has hobbled energy projects over the past three years.

Dubai, one of seven emirates that make up the United Arab Emirates, has been rocked by the financial crisis and credit-rating agencies have slashed their outlooks on a number of Dubai-controlled entities, including property developers.

Nigeria is one of Africa’s biggest oil producers, and has the world’s seventh-biggest proven natural-gas reserves, but it has a poor track record of developing those supplies.

For decades, foreign companies working with the NNPC have flared off most of Nigeria’s oil-associated gas because the domestic market was small with few industrial and retail consumers. This has begun to change in the past decade with the building of terminals that liquefy natural gas for export on tankers bound for Europe and the U.S.

Foreign oil companies have resisted investing more in Nigeria’s domestic gas and power infrastructure, in part because of low gas prices set by the government. It is unclear if Dubai will get any financial breaks on its gas and power investments because of the country’s low retail energy prices.