The Nigerian Delta in West Africa has become a major oil producing area in recent years. According to the Energy Information Administration, Nigeria is the largest producer of oil and natural gas in Africa and the 11th largest in the world. Averaging 2.5 million barrels of oil a day, Nigeria’s production has increased from under 1.5 million barrels a day in the late 1980s.
Because production in Nigeria is increasing, “Peak-Production” oil theorists such as Matt Simmons and Ken Deffeyes rarely mention the country when discussing their fears that the world is rapidly running out of oil. Craig Smith and I wrote “Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil,” to present you, the reader, with alternative information. We argue that the experience in Nigeria supports the abiotic, “Deep-Earth” theory of the origin of oil, as well as validating our thesis that world proven oil reserves are expanding, not contracting, despite “peak-production” arguments to the contrary.
Much of Nigeria’s current oil production is coming from fields in the Niger River Delta. In August 2004, the Nigerian National Petroleum Company estimated that $7 billion per year would be needed to develop new licenses that were being offered in 61 deepwater and inland blocks in the Gulf of Guinea as of March 2005. Nigerian oil officials estimate that by 2011, new discoveries will bring the country’s proven oil reserves to approximately 40 billion barrels.
U.S. oil companies are heavily involved in Nigerian oil and gas exploration and production. ExxonMobil currently produces around 570,000 barrels of oil per day in Nigeria and plans to invest $11 billion in the Nigerian oil sector by 2011, with plans to take production to 1.2 million barrels per day. ChevronTexico and ConocoPhillips are also heavily involved in the Nigerian oil sector. In 2005, Nigeria is the fifth largest importer of oil to the United States (1.1 million barrels a day), right behind Mexico (approximately 1.75 million barrels a day), Canada (1.72 million), Saudi Arabia (1.4 million), and Venezuela (1.3 million).
Rigzone.com documents 22 deepwater rigs operating in Nigerian oil exploration and production. Sophisticated floating movable rigs such as the Deepwater Pathfinder, a double-hull tanker built by Samsung, is rated for 10,000 feet (1.9 miles) of water and drilling at a depth of 30,000 feet (5.7 miles). Oil geologists utilizing ultra-deep offshore techniques going down 5 to 8 miles under the surface of the water rarely spend much time debating whether the origin of the oil they are finding is abiotic or “fossil fuel.” Most of their time they just spend going after the oil they know is down there.
Chietigj Bajpaee, writing in the Asian Times, indicates that Africa holds approximately 8 percent of the world’s oil supply, but the region is also vulnerable to instability ranging from political violence and terrorism, to tribal conflict and ethnic unrest, to corruption rampant within government and industry, to severe health problems such as the AIDS epidemic. Despite the new-found oil wealth, Nigeria remains a poor country where the wealth is not broadly distributed among the population. As the Asian Times reports:
For instance, while Nigeria has earned $300 billion in oil revenues over the last 25 years, per capita income remains below $1 per day. Nigeria is also subject to ethnic violence, oil strikes and sporadic attacks on oil infrastructure by the Niger Delta People’s Volunteer Force. Adding Sino-U.S. energy competition to this volatile mix could further destabilize the region.
Within the next 10 years, the U.S. National Intelligence Council estimates that the United States could be dependent upon Nigeria for fully a quarter of our oil supplies. In “Black Gold Stranglehold,” we present a seven-point plan to move the United States toward energy independence. Relying heavily upon Nigeria for a substantial portion of our imported oil makes the United States increasingly vulnerable to the effects of the rampant internal problems Nigeria continues to experience.
The oil industry accounts for 90 percent of Nigeria’s total foreign exchange revenue. Nigeria remains a member of OPEC, although conflicts over production quotas remain a source of conflict. OPEC increased Nigeria’s production quotas three times in 2004 and Nigeria continues to threaten to leave OPEC, a move which would allow Nigeria to increase production to meet the increased demands of the many multinational oil companies that have substantial interests there.
Today, most of Nigeria’s production comes from many, small producing fields in the Niger River Delta. Altogether, some 600 fields, most with less than 100 million barrels of extractable oil reserves, constitute the bulk of Nigerian oil production. Increasingly, as offshore leases are being granted, Nigeria expects that mix to shift in favor of larger ultra-deep wells being explored offshore. Exactly how much oil remains to be discovered offshore Nigeria is unknown. Still, the billions of dollars being poured into developing Nigerian oil resources by multinational oil countries would strongly suggest that stated reserve targets for Nigeria are well within reason.
In “Black Gold Stranglehold” we argue that America’s growing dependence on foreign oil reduces our independence in foreign affairs. Rather than working to reverse Nigeria’s massive human problems, the United States is forced to work with a government that has little regard for the rights, economic well-being, or even the physical health of a great number of Nigerian people. Instead of opposing the political corruption, which has characterized Nigerian business and government for decades, America is turning a blind eye because we need the oil.
“Black Gold Stranglehold” presents a seven-point plan for America to reach oil independence. Rather than increasing the amount of oil we import from foreign countries, we argue that steps can be taken right now to increase oil exploration and production in America. The experience in Nigeria again suggests that offshore oil is readily available worldwide.
America is uniquely blessed with two ocean shores and abundant oil being found in the Gulf of Mexico. We argue that American oil companies should be expanding oil exploration and production at home, even if it means confronting radical environmentalists who want to stop all offshore oil exploration along our coasts, regardless how environmentally sound the oil exploration and production plans might be.
Maybe the Sierra Club should register as a foreign agent lobbying group. Why? By blocking any and all efforts to expand oil exploration off our domestic shores, no other group in the world has done more than the Sierra Club to sell oil for Nigeria.