• 4 hours Midwestern Refiners Seek Canadian Oil To Expand Output
  • 9 hours UK On Track To Approve Construction of “Mini” Nuclear Reactors
  • 13 hours LNG Glut To Continue Into 2020s, IEA Says
  • 15 hours Oil Nears $52 With Record OPEC Deal Compliance
  • 18 hours Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 20 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 21 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 4 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 4 days Schlumberger Warns Of Moderating Investment In North America
  • 4 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 4 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 4 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 4 days New Video Game Targets Oil Infrastructure
  • 4 days Shell Restarts Bonny Light Exports
  • 4 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 4 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 5 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 5 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 5 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 5 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 5 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 5 days Rosneft Signs $400M Deal With Kurdistan
  • 5 days Kinder Morgan Warns About Trans Mountain Delays
  • 5 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 6 days Russia, Saudis Team Up To Boost Fracking Tech
  • 6 days Conflicting News Spurs Doubt On Aramco IPO
  • 6 days Exxon Starts Production At New Refinery In Texas
  • 6 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 7 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 7 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 7 days China To Take 5% Of Rosneft’s Output In New Deal
  • 7 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 7 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 7 days VW Fails To Secure Critical Commodity For EVs
  • 7 days Enbridge Pipeline Expansion Finally Approved
  • 7 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
Alt Text

Canada’s Pipeline Industry Takes Another Hit

Canada’s struggling oil industry has…

Alt Text

Trump’s Iran Decision Haunts Big Oil

Donald Trump’s Iran decision has…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Nigeria’s "Zero Oil Plan"

Nigeria

I recently reported on the development of economic diversification plans among countries in the Gulf Cooperation Council (GCC) as oil demand prepares to reach a climax in 30 years. Nigeria, among other African producers, has begun to adopt the same policy, according to new goals announced by Abuja this week.

The National Economic Council (NEC) aims to increase total non-oil government revenues fivefold from $5 billion to $25 billion over an unspecified timeline. Nigerian oil revenues collapsed by $100 billion between 2015 and 2017 due to the ongoing oil price crisis, curtailed only slightly by the Organization of Petroleum Exporting Countries’ (OPEC) agreement to lower output by 1.2 million barrels per day.

A militancy in the Niger Delta seriously curtailed oil production in the country’s oil-rich areas. Locals argue that Lagos, the Nigerian economic capital, and Abuja, the political capital, have monopolized the nation’s oil wealth, leaving those residents near major oilfields on the lowest rungs of the socioeconomic ladder. The year 2016 saw systematic attacks against foreign oil infrastructure in the Niger Delta by militant groups demanding increased investment in the area’s human resources.

In response, Vice President Yemi Osinbajo, who has taken the lead role in governing the country due to the president’s unspecified illness, led a campaign to engage local leaders in devising a revenue-sharing agreement and authorizing a legalization program for a select group of makeshift refineries. Those facilities are notorious for refining stolen oil for use by locals.

“The [Nigerian Export Promotion Council] (NEPC) made a presentation to the NEC on a plan to restructure the Nigerian economy to survive without crude oil,” said the group’s director General Segun Awolowo. “The plan is called the Zero Oil plan.”

Related: This Giant Oil Trader Sees Upside For Oil Prices

Over the next 10 years, the plan could add $150 billion to Nigeria’s foreign reserves, create 500,000 new jobs, and lift 10 million citizens out of poverty. Nigeria is lambasted internationally for its corruption in all three branches of government. To make the oil-free dream a reality, the NEPC plans to increase the exports of key crops, including rice, wheat, corn, palm oil, rubber, hides and skin, sugar, and soya beans. The list shows the plan’s limited scope. Abuja doesn’t see itself expanding into a serious manufacturing hub anytime soon, nor does it demonstrate an interest in growing a competitive technological sector that would bring the economy into the 21st century.

The plan lists the countries it will target with its new agricultural economy. The European and Asian markets will be Nigeria’s biggest prizes, provided output volumes rise high enough to sustain a meaningful market share in those regions.

The NEPC’s stated goal of raising foreign currency reserves relates to Abuja’s dependency on foreign refineries to process crude extracted from Nigerian lands. Years of foregone maintenance has left the country’s refining equipment defunct, forcing the government to export domestic oil, pay for its processing in foreign currency, and ship it back for local use. So far, the government has commissioned the renovation of key refineries, but the projects will take years to complete.

Most economic diversification plans sound good on paper, but their implementation requires a resolute stance from all senior officials that the adaptation is fundamentally necessary and unavoidable. The state of the Zero Oil initiative currently outlined by Abuja’s high command promises a future in the commodities trade, without charting a path for future industries to take root.

Similar plans by the Gulf include blueprints for a new education system and a concrete budget for other expenditures related to the diversification project. A November report on the Nigerian plan is due, so a final verdict on the durability of Abuja’s grand plan will have to wait until then.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News