OIL PRICE
The Nigerian oil industry has had a roller coaster of a year. In January, Shell announced that it would be exiting the West African nation’s onshore oil industry after nearly a century of operations as a result of unstable and unsavory operational conditions. British supermajor Shell is just the latest western company to pull out of Nigeria’s oil industry, which now finds itself in rapid decline. At the same time, however, Nigeria is getting ready to open up one of the world’s largest oil refineries with the potential to be a major player in global oil markets.
Nigeria’s oil sector has been plagued with troubles for years now, pushing major oil interests to pull out of the oil rich nation. According to reporting from the U.S. News & World Report, Shell’s decision to sell off its Nigerian subsidiary for $2.4 billion was due to the fact that the company “has struggled for years with hundreds of onshore oil spills as a result of theft, sabotage and operational issues that led to costly repairs and high-profile lawsuits.” Shell’s decision to pull out of Nigeria comes on the heels of similar decisions from Houston-based Exxon Mobil, Italy’s Eni and Norway’s Equinor.
In the wake of the West’s exodus from the Nigerian oil sector, the industry remains in a state of heightened flux and uncertainty. The country’s energy landscape, which includes the 11th largest proven oil reserves in the world (just behind the United States), “has grappled with poor governance, weak institutions, deteriorating security conditions, spiraling economic decline, and uninspired leadership” according to an analysis from the Center for Strategic & International Studies.
The weakening of Nigeria’s oil production capacity also comes at a time that the nation is preparing to bring the massive Dangote refinery online.
Connect with us on our socials: