N800bn! The Amount Nigeria Spends On Export Of Crude Oil In A Year
The worth of Nigeria’s investments on marine vessels for crude exports has hit N800 billion ($4 billion) in one year. This came as the United States’ Energy Information Administration (EIA) revealed that Nigeria’s 10 per cent contribution of overall US oil imports in 2010 had fallen to zero per cent in 2015. Nigeria, Africa’s biggest crude exporter, had, according to statistics from the Nigerian Content Development and Monitoring Board (NCDMB), hitherto spent less than $4 billion yearly before 2014.
New Telegraph gathered at the weekend that the NCDMB has already began a process to reduce the cost, which it considered outrageous. The process, which a source at the agency said at the weekend, began by the immediate past Executive Secretary of the bard, Ernest Nwapa, is being given speedy execution by the new Executive Secretary. He said: “Nigeria spends $4 billion on marine vessels to export the country’s crude, and that the local content board is encouraging the foreign companies to partner some Nigerian companies to sell off some of their equities.”
Talks, he said, had begun at different levels of engagements, adding that an understanding had been reached with states such as Imo and Bayelsa. “Bayelsa and Imo states had made land available for indigenous equipment manufacturers to promote the local content policy,” he said. According him, Shell has also agreed to build a jetty worth $10 million in Bayelsa and this process is being given speedy coordination by the new Executive Secretary.
Meanwhile, EIA has said that crude oil production in Nigeria increased to 2.520 million barrels per day in April from 2.420 million per day in March of 2015. The petroleum industry in Nigeria is the largest on the African continent. As of 2014, Nigeria’s petroleum industry contributes about 14 per cent to its economy. Therefore, though the petroleum sector is important, it remains, in fact, a small part of the country’s overall diversified economy.
As a result of the numerous small fields, an extensive and well-developed pipeline network has been engineered to transport the crude. Also, because of the lack of highly productive fields, money from the jointly operated (with the Federal Government) companies is constantly directed towards petroleum exploration and production. Nigeria’s petroleum is classified mostly as “light” and “sweet”, as the oil is largely free of sulphur. Nigeria is the largest producer of sweet oil in OPEC.
This sweet oil is similar in composition to petroleum extracted from the North Sea. This crude oil is known as “Bonny light.” Names of other Nigerian crudes, all of which are named according to export terminal, are Qua Ibo, Escravos blend, Brass River, Forcados, and Pennington Anfan. As recently as 2010, Nigeria provided about 10 per cent of overall US oil imports and ranked as the fifth-largest source for oil imports in the US.
However, Nigeria ceased exports to the US in July 2014, because of the impact of shale production in America; India is now the largest consumer of Nigerian oil. There are six petroleum exportation terminals in the country.
Shell owns two, while Mobil, Chevron, Texaco, and Agip own one each. Shell also owns the Forcados Terminal, which is capable of storing 13 million barrels (2,100,000 m3) of crude oil in conjunction with the nearby Bonny Terminal. Mobil operates primarily out of the Qua Iboe Terminal in Akwa Ibom State, while Chevron owns the Escravos Terminal located in Delta State and has a storage capacity of 3.6 million barrels (570,000 m3). Agip operates the Brass Terminal in Brass, a town 113 km southwest of Port Harcourt and has a storage capacity of 3,558,000 barrels (565,700 m3). Texaco operates the Pennington Terminal.