Contending Issues in the Niger Delta Crisis of Nigeria - Journal of ...

Chapter IX: The Politics and Policies of Oil Deregulation in Nigeria:
Implications and Policy Suggestions
militias on oil installations and production in the region. Local and
Foreign oil workers are being regularly kidnapped by the militias for
ransomed money which is used for the procurement of arms. The
substantial presence in the region of the Nigerian Army and other
security forces has had no effect in deterring the militias from
destroying vital oil installations and blocking some oil exports. There
is some evidence that personnel of the armed forces often collude with
the militia and are, themselves, involved in the wide spread lucrative
oil bunkering in the troubled region. Daily, some 100million barrels
of oil are being shipped out illegally from Nigeria.
Most of the foreign owned oil companies, including Shell, the
largest, have being forced by the militia to shut down some of their oil
wells and cut production, as well as oil exports. It is estimated that
because of the instability in the region Nigeria is now losing some 750
millions barrel of oil export daily, about a third of its oil production
and exports. That represents an estimated annual loss in revenue to
Nigeria of over $20 billion. Oil exports still account for about 90 per
cent of Nigeria total exports and foreign exchange earnings. Angola is
reported to have overtaken Nigeria as the largest oil producer in
Africa, with foreign oil investors preferring to invest more in the
Angolan oil field. New oil fields in the Sudan, Equatorial Guinea and
Cameroon offer increasingly better alternative prospects to the foreign
oil companies as new sources of supply, at a time when global
demand for oil and oil prices are increasing rapidly.
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