It’s Official: America permanently turns its back on Nigeria’s oil
The US as the highest buyer of Nigeria’s crude is now a thing of the past.
Nigeria used to be an important oil supplier to the United States, until July 2014. Data obtained by XCLUSIVE Magazine from the US Energy Information Administration (EIA) indicate that the US has not imported a single barrel of crude oil from Nigeria since July 2014.
This move by America has sent shockwaves to the Nigerian economy that depends largely on its oil for its revenue. Though it appears Goodluck Jonathan administration is putting up a bold face, as Nigeria now hobnobs with India, its new largest crude oil buyer, .
The EIA data show the sizable decline in the US imports of Nigeria’s crude oil over the years. They reveal that “the United States imported 406,000 bbl/d of crude oil from Nigeria in 2012, the lowest volume since 1986 and an almost 50% drop from the average volume imported in 2011. Nigeria fell from being the fifth largest foreign oil supplier to the United States to the sixth in 2012.
“The trend continued in 2013. EIA data from January to August 2013 show that the United States imported an average of 293,000 bbl/d of crude oil from Nigeria, accounting for slightly less than 4% of total U.S. crude oil imports. During that time period, Nigeria was the eighth largest foreign oil supplier to the United States.”
In July 2014, however, “imports from Nigeria fell to zero, down from 89,000 bpd in June, all of which had gone to the US Atlantic Coast.”
The EIA data attributes the reason for this decline to “the growth in U.S. light, sweet crude oil production from the Bakken and Eagle Ford.”
Way back in February 2014, oil industry experts had warned the Federal government that the discovery of the Bakken and Marcellus shale formations (Shale Oil – is a substitute for conventional crude oil.) potent a great danger to the Nigerian economy.
Mr. Dimeji Salaudeen, Partner, Risk Consulting/Head, Africa Oil and Gas Sector, KPMG, had observed that “with the advent of Shale, Nigeria will cease to be the major supplier of crude to the six largest economy of the world.”
Mr. Michiel Soeting, the Global Head, Energy and Natural Resources Practices, KPMG, had then advised that to significantly reduce the effect of Shale oil discovery on the country’s revenue, Nigeria should “put in place measures that will grow its crude production capacity, diversify the economy, as well as build additional crude oil refineries.”
Mr. Victor Onyenkpa, Partner and Head, Tax, Regulatory and People Services, KPMG echoed Soeting’s position when he advised the government to “look elsewhere to sell its crude, as many of its current customers will become energy producers.”
Whether Nigeria will heed their advice is yet to be seen.