Nigeria is keen on creating a state-owned petroleum firm modeled after Saudi Arabia`s Aramco, according to the country`s energy minister who acknowledged Nigeria is a long way away from rivaling the Middle East oil giant.
Odein Ajumogobia called Aramco, which exercises full control of Saudi oil reserves, Nigeria`s 'goal of where we would like to be.'
Nigeria`s energy minister, who only assumed his new post six weeks ago, said foreign oil and gas firms operating in the Niger Delta had different objectives for the country than the Nigerian government. He also said there was a 'misalignment between our national aspirations as a country and the commercial objectives' of those foreign firms operating in the delta, home to Nigeria`s vast petroleum reserves.
Ajumogobia`s call for a new way forward for the energy sector followed the recent decision to break down its state-run oil company into five entities in an effort to become more efficient and profitable, while curtailing corruption.
The new entity will replace the Nigerian National Petroleum Co. with the Nigerian Petroleum Co., which analysts say will function more like a state-owned oil firm rather than a government agency.
Nigeria`s current petroleum regulator has suffered from chronic capital shortfalls and been the subject of much scrutiny over its falling output. NNPC was reportedly $1.6 billion short in meeting its 2006 expenses and had to be propped up by other sectors of the Nigerian economy though it accounts for an estimated 85 percent of the government`s revenue.
Nigerian President Umaru Yar`Adua laid out a six-month plan to create NPC and its offshoots for exploration, production and export. He also appointed a national energy council to oversee the project in the coming months.
While some praised his effort, others contend Yar`Adua has reorganized Nigeria`s oil and gas sectors to increase his own influence over the country`s top source of revenue. Foreign oil firms operating in Nigeria are watching the restructuring carefully for signs the Nigerian government could also seek to alter extraction and exploration agreements.
The decision to restructure Nigeria`s oil and gas sectors follows a recent report showing the sector loses $14 billion a year to theft.
Monetary losses incurred by the oil sector were calculated based on the estimated number of barrels of lost production due to corruption and crime, President of the Corporate Council on Africa Stephen Hayes said last month.
'If you are losing 600,000 barrels a day on oil at $70 a barrel, you are losing $12 million a day on oil theft,' he said.
Before stepped-up hostilities by militant and other armed groups in the Niger Delta -- home to the country`s oil and gas wealth -- began in late 2005, Nigeria claimed to be producing about 2.5 million barrels per day. Since then production has reportedly decreased by at least 20 percent, perhaps even by one-third, warn some analysts.
In and around the delta`s de facto capital, Port Harcourt, a spike in violence has raised concerns about the long-term viability of doing business in the region, where foreign oil and gas operations are regularly targeted.
The unidentified body of one foreign worker was discovered in the delta this week, while two of the 11 government officials kidnapped in recent days were released Wednesday.
'The situation in Port Harcourt will remain unstable in the short term until Nigerian authorities can regain some level of control,' read a recent report by Stratfor consulting group.
'Many companies with oil operations in the Niger Delta are based out of or supported by companies in Port Harcourt. These companies and their personnel have not been specifically targeted by the groups involved in the fighting.
'However, in any unstable situation, there is always the chance that they or their personnel will get caught up in the violence.'
Despite production disruptions attributed to 'bunkering,' when oil and gas lines are tapped at times resulting in deadly explosions, illegal sales and violence attributed to armed gangs and militants, some Nigerians say they see a silver lining to the delta`s and Nigeria`s dilemmas.
In August a leading Nigerian rights group praised Yar`Adua for his efforts to tackle corruption and violence.
The Niger Delta has been a flash point for decades amid accusations of government graft and corrupt practices by foreign oil companies.
Via| United Press InternationalOdein Ajumogobia called Aramco, which exercises full control of Saudi oil reserves, Nigeria`s 'goal of where we would like to be.'
Nigeria`s energy minister, who only assumed his new post six weeks ago, said foreign oil and gas firms operating in the Niger Delta had different objectives for the country than the Nigerian government. He also said there was a 'misalignment between our national aspirations as a country and the commercial objectives' of those foreign firms operating in the delta, home to Nigeria`s vast petroleum reserves.
Ajumogobia`s call for a new way forward for the energy sector followed the recent decision to break down its state-run oil company into five entities in an effort to become more efficient and profitable, while curtailing corruption.
The new entity will replace the Nigerian National Petroleum Co. with the Nigerian Petroleum Co., which analysts say will function more like a state-owned oil firm rather than a government agency.
Nigeria`s current petroleum regulator has suffered from chronic capital shortfalls and been the subject of much scrutiny over its falling output. NNPC was reportedly $1.6 billion short in meeting its 2006 expenses and had to be propped up by other sectors of the Nigerian economy though it accounts for an estimated 85 percent of the government`s revenue.
Nigerian President Umaru Yar`Adua laid out a six-month plan to create NPC and its offshoots for exploration, production and export. He also appointed a national energy council to oversee the project in the coming months.
While some praised his effort, others contend Yar`Adua has reorganized Nigeria`s oil and gas sectors to increase his own influence over the country`s top source of revenue. Foreign oil firms operating in Nigeria are watching the restructuring carefully for signs the Nigerian government could also seek to alter extraction and exploration agreements.
The decision to restructure Nigeria`s oil and gas sectors follows a recent report showing the sector loses $14 billion a year to theft.
Monetary losses incurred by the oil sector were calculated based on the estimated number of barrels of lost production due to corruption and crime, President of the Corporate Council on Africa Stephen Hayes said last month.
'If you are losing 600,000 barrels a day on oil at $70 a barrel, you are losing $12 million a day on oil theft,' he said.
Before stepped-up hostilities by militant and other armed groups in the Niger Delta -- home to the country`s oil and gas wealth -- began in late 2005, Nigeria claimed to be producing about 2.5 million barrels per day. Since then production has reportedly decreased by at least 20 percent, perhaps even by one-third, warn some analysts.
In and around the delta`s de facto capital, Port Harcourt, a spike in violence has raised concerns about the long-term viability of doing business in the region, where foreign oil and gas operations are regularly targeted.
The unidentified body of one foreign worker was discovered in the delta this week, while two of the 11 government officials kidnapped in recent days were released Wednesday.
'The situation in Port Harcourt will remain unstable in the short term until Nigerian authorities can regain some level of control,' read a recent report by Stratfor consulting group.
'Many companies with oil operations in the Niger Delta are based out of or supported by companies in Port Harcourt. These companies and their personnel have not been specifically targeted by the groups involved in the fighting.
'However, in any unstable situation, there is always the chance that they or their personnel will get caught up in the violence.'
Despite production disruptions attributed to 'bunkering,' when oil and gas lines are tapped at times resulting in deadly explosions, illegal sales and violence attributed to armed gangs and militants, some Nigerians say they see a silver lining to the delta`s and Nigeria`s dilemmas.
In August a leading Nigerian rights group praised Yar`Adua for his efforts to tackle corruption and violence.
The Niger Delta has been a flash point for decades amid accusations of government graft and corrupt practices by foreign oil companies.
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