DECLINING U.S. DEMAND FOR NIGERIA’S OIL, THREAT TO ECONOMY –FG

•2013 budget delays $1b Ogoniland clean up

•NNPC, Shell, others to contribute 80%

Federal Government on Tuesday acknowledged for the first time that it faces challenges over the declining demand for Nigeria’s crude oil by the United States of America which has increased its local production to attain self sufficiency.

The U.S. is a major importer of Nigeria’s oil which accounts for over 80 per cent of its export, and 75.6 per cent of government revenues between January and November 2012, according to data by the Central Bank of Nigeria (CBN).

The local economy is crude sale driven and dependent on government patronage.

Minister of Petroleum Resources, Diezani Alison-Madueke, who disclosed this at the on-going 13th Nigeria Oil and Gas (NOG) conference in Abuja, said government was seeking for ways to ‘finger print’ the country’s crude oil to check increasing theft.

The minister disclosed this just as Daily Independent has gathered that the cleanup of the oil spill in Ogoniland and other impacted areas of the Niger Delta region is being delayed by refusal of the Presidency to assent the 2013 Appropriation Bill as passed by the National Assembly in December.

According to Alison-Madueke, the declining import of Nigeria’s oil by the U.S. and changing international business climate must be met by increased efficiency and deployment of modern technology in Nigeria.

She said: “The world is now becoming even more competitive all round. The U.S. shale oil and the increase in their gas production are already affecting our export to United States. The U.S. is one of our major importers.

“We must therefore as an industry and country improve our efficiency, our technical creativity and ensure that we increase our levels of proficiency to remain absolutely competitive in all ramifications over the next few years and beyond.

“We are championing the crude oil finger print (or) as we call it blood money initiative to detect crude oil theft and purchase by other countries.

“The President has started reaching out to his counterparts in various countries where we feel that some of our products are being refined and also where fiscal entities throughout the world are laundering the funds that are made as a result of the bunkering.

“The products of bunkering are not sold in ECOWAS waters, neither are the financial output accrued from there laundered in West African banks. They are actually ending up in far-flung international fiscal institutions.

“The President is in discussion with the leaders of these countries and they are all coming on board,” she said.

Alison-Madueke noted that the Petroleum Industry Bill currently before the National Assembly represents the future for the nation and the industry as it intends to introduce a balance reform that would favour both the people and the industry operators.

The delay in signing the budget by the President has been linked to grey areas that need to be agreed upon between the executive and legislative arms, including the adopted oil benchmark and provisions for constituency projects for the lawmakers.

A Presidency source told Daily Independent on the sideline of the ongoing Nigeria Oil and Gas conference in Abuja that the first phase of the Ogoniland cleanup may begin by April.

The source said: “We envisaged the problem would be overcome latest by March while we look at April as a viable date for the project to commence.”

Expectations are that the first phase of the project estimated by the United Nations Environmental Protection (UNEP) to gulp $1 billion would be completed by 2019 to pave way for rehabilitation of oil facilities and eventual oil production.

“Under the government approved plan, the NNPC/SHELL /TEPN/AGIP Joint Venture that operate in the area is to contribute 80 per cent of the funds while downstream operators, especially refineries and ecological fund would provide 5 per cent and 15 per cent respectively.”

The source added that the project would be executed through the Hydrocarbon Pollution Restoration Project (HYPREP) established last year to implement the recommendations of the UNEP report on Ogoniland.

“We do not envisage many challenges as HYPREP has already opened operational offices in strategic locations, including Port Harcourt, to enhance easy and efficient operations,” he emphasised.

The UNEP report disclosed that during aerial reconnaissance missions, UN experts observed oil pollution which was not readily visible from the ground, including artisanal refining sites.

It added that information provided by Ogoni residents about oil contamination in their communities supplemented official oil spill data supplied by the Nigerian government and SPDC.

The report also noted that UNEP identified 69 sites for detailed soil and groundwater investigations.

Source: Daily Independent