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Good Times...
Hydrocarbon as a
predominant source of
energy supply for the
global econonmy has been
at the center-stage for
over half a century now.
In recent months due to
a plethora of
geopolitical and
economic factors the
price of crude oil hit
an all time high.
reaching $55 a barrel in
October 2004. Analysts
at the
investment-banking firm
of Morgan Stanley
forecast that prices
could surpass the $80
mark by the end of the
year.
As the seventh largest
exporter of this
lucratice raw material
Nigeria has been having
a field day. This single
product is the pivotal
wheel on which the
economy and politics
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of
the country revolves. Already Nigeria’s
export revenue has surpassed $20 billion
this year, just as foreigh reserves have
ballooned to over $13 billion. But in
the face of this price euphoria the
country is still saddled with countless
social and economic problems chiefly
amongst which is the embarrassing cost
of imported fuel amidst widespread
poverty.
Could you imagine what would have been
(or would be) of Nigeria without its
crude oil revenue? Chad or Niger would
seem like paradise. Current estimates of
proven reserves are put at over 30
billion barrels. The government is
pursuing an ambitious policy of
increasing crude reserves to 40 billion
barrels in the next 2-3 years and
totally eradicating gas flaring by 2005.
These targets are plausible and seem
quite achievable given the recent major
discoveries in the deep offshore region
in Gulf of Guinea-mainly Bonga and
Agbemi fields by multinational
corporations.
...How Long More?
Crucial signposts to rising global
energy consumption are the industrial
growth spurt being experienced by China
and India. Consumption pattern is also
on the upswing in newly democratic
countries of East and Central Europe, as
well as the European Union and US
itself. All this bode well for OPEC and
Nigeria in the long term. However
experience shows that is impossible to
predict or maintain stable crude prices
for a prolonged period. Chances are that
the higher prices go, the more
incentives other countries have to drill
for new fields or find alternative
sources of energy. Solar energy and
natural gas as new and cleaner sources
of energy will gradually continue to
erode the role of crude oil.
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