nigerian oil executive expresses his concern on delta crises

Nigerian Oil Executive Expresses His concern on Delta Crises

07-10-2008

In an article in the July 2008 issue of African Business, oil company executive Osamede Okhomina writes: “In a global economy, our crisis in the Niger Delta can have a terrifying impact on all of us.”

Okhomina, Managing Director of Energy Equity Resources (www.eeras.com), echoes concerns expressed by others who point out the significant effect Nigeria ’s production crisis has had on the rise in global oil prices. For instance, in congressional testimony last month, energy expert Daniel Yergin told members of the Joint Economic Committee:

“Particularly noteworthy is Nigeria , one of the key exporting countries and one particularly important to the United States . For the past few years, 20 to 30 percent of Nigeria ’s output disrupted by rebel attacks. Currently, almost a million barrels a day of Nigerian oil has been removed from the market—representing a loss of 40 percent of Nigeria ’s capacity…. The result of all of this is a much tighter market—in terms of the balance between supply and demand—than had been customary for several decades.”

In “The Delta – our abused, neglected child,” his African Business article, Osamede Okhomina asks, “What if [Nigerian] oil production fell, as it did in April and May this year, but even more dramatically?” He answers:

“In today’s global market, such a Doomsday scenario is not some far-off, theoretical possibility. It started happening this spring…. The fall in output was reckoned to have had a direct impact on peaking fuel prices worldwide, hence also the sudden emergencies that hit the smallest and the largest countries alike – from South East Asia to the [ United States ]. Everywhere.”

While being interviewed on the BBC World Service radio program, “Network Africa,” on July 4th, Okhomina was asked: “Right now, oil is hitting close to $140 and even going higher per barrel. Do you think that the situation in the Niger Delta could actually get worse? And, as a result, have an impact on the price of oil?” His reply was brief but direct:

“I think it is getting worse,” said Okhomina. “We could see more radical decline in production. So it could get worse.”

Energy Equity Resources, a London-based, Anglo-Norwegian oil and gas exploration company, numbers among its partners Addax, Anadarko, Chevron, and others in the Gulf of Guinea . EER’s projects are located at Nigeria ’s Ajapa OML 90; Aje OML 113; and OML 115 fields. Other EER assets under active development include offshore blocks in Mauritania and São Tomé e Principe and Nigeria ’s Joint Development Zone (JDZ).