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Nigeria's US crude export rises by 16 per cent

Published date:
Sunday, 19 July 2009

In

a development that seems to lend credence to analysts' view that the United States (U.S.) might be looking beyond the strife-torn Middle-East for its energy needs, the U.S. crude oil import from African sources is on the upswing with Nigeria recording a 16.2 per cent rise in its crude export to the U.S. last year.

In fact, according to a new report by the International Trade Administration of the U.S. Department of Commerce, other African oil producers even did better than Nigeria in exporting crude to the U.S.

The report came ahead of the eighth yearly U.S.-sub-Saharan Africa Trade and Economic Co-operation Forum scheduled to hold in Nairobi, Kenya, from August 4 - 6, 2009.

Meanwhile, stakeholders in the Nigerian oil and gas industry were yesterday assured that their concerns as raised in the proposed Petroleum Industry Bill (PIB) currently before the National Assembly would be addressed by the lawmakers, especially for the growth of indigenous companies in the sector.

Speaker, House of Representatives, Dimeji Bankole, gave the assurance at the weekend in Singapore while inaugurating a Floating Production Storage Offloading (FPSO) vessel being constructed by an indigenous oil exploration and production company, Allied Energy Plc, which hopes to start its operations in Nigeria before the end of this year.

According to the U.S. Commerce Department report, the "U.S. imports from the oil-producing countries grew in every case, and specifically with U.S. oil imports from Nigeria growing by 16.2 per cent last year."

It added that Angola's crude export to the U.S. grew by a 51.2 per cent; Democratic Republic of Congo (DRC), 65.2 per cent; Equatorial Guinea, 89.5 per cent; Chad, 55.4 per cent; and from Gabon by 4.4 per cent.

According to recent reports, Nigeria has, however, lost some of its share of the global oil and gas market to the Middle Eastern nations and Russia owing to the activities of militants in the Niger Delta. The U.S. government has announced that its own oil importation from Nigeria has been on the rise, even though other African oil producers did even better than Nigeria as the records for last year now show.

On products exchanged under the African Growth Opportunity Act, Nigeria also featured among the top five beneficiary countries in 2008 from Africa.

The report listed Nigeria, Angola, South Africa, Chad and the Republic of Congo as the top five AGOA beneficiaries last year. Other leading AGOA beneficiaries included Gabon, Cameroun, Lesotho, Madagascar, Kenya, Swaziland and Mauritius.

But according to the report, the U.S. merchandise trade deficit with sub-Saharan Africa continued to widen in 2008 to $67.5 billion, from $53.0 billion in 2007. Nigeria led others in that deficit gap. The report said Nigeria, alongside Angola, the DRC, South Africa, Chad, and Equatorial Guinea, accounted for 97.2 per cent of the U.S. trade deficit with sub-Saharan Africa in 2008.

The U.S. imports in 2008 increased by 27.8 per cent to $86.1 billion, the report stated, attributing the growth to a significant increase of 31.9 per cent in crude oil imports - accounting for 79.5 per cent of total imports - from sub-Saharan Africa.

Of the top five African destinations for U.S. products, exports to South Africa rose by 17.6 per cent; Nigeria, 47.7 per cent; Angola, 65.4 per cent; Benin Republic, 192.4 per cent, which was due to a large increase in the export of non-crude oil and vehicles and parts; and Ghana, 46.2 per cent.

It is believed that a good number of the vehicles brought into Benin Republic from the U.S. actually ended up in Nigeria.

In all, according to the report, U.S. trade with sub-Saharan Africa increased 28 per cent in 2008. It also disclosed that U.S. imports under AGOA are becoming increasingly diversified, even as oil dominated the trade. Some of the products growing under the trade agreement include jewelry and jewelry parts; fruit and nut products; fruit juices; leather products; plastic products; and cocoa paste.

The U.S. export, the report said, increased by 29.3 per cent to $18.6 billion, driven by growth in several sectors, including machinery, vehicles and parts, wheat, non-crude oil, aircraft, electrical and telecommunications equipment.

In 2008, U.S. import under AGOA was $66.3 billion, 29.8 per cent more than in 2007. This figure includes duty-free imports from AGOA-eligible countries under both the U.S. Generalised System of Preferences (GSP) and the expanded AGOA GSP, plus textile and apparel items imported duty-free and quota-free under AGOA provisions.

Petroleum products continued to account for the largest portion of AGOA imports, with a 92.3 per cent share of overall AGOA imports. Excluding the fuel products, AGOA import came to $5.1 billion in monetary term, increasing by 51.2 per cent. Much of the increase was due to a 224.8 per cent upshot in transportation equipment importation virtually from South Africa.

Minerals and metals also increased under AGOA by 58.8 per cent; chemical and related products, 38.7 per cent. But textile and agricultural import declined by 10.4 and 7.9 per cent in that order.

Bankole said the PIB would go through normal legislative process during which stakeholders, including the indigenous operators, would be given the opportunity to make their input into it.

Commending Allied Energy, Bankole said: "We urged other indigenous companies to emulate the commitment exercised by Allied Energy Plc. I therefore, call on foreign investors to also take the advantage of the operating business environment in Nigeria and invest in the immense potential of our oil and gas industry."

Indigenous oil companies have decried alleged layers of taxes included in the third version of the PIB, arguing that if it is passed in its current form, the bill would impact negatively on their operations.

Bankole also said: "The indigenous firms, which produce just three per cent of the nation's oil output, are also worried with a section of the bill which says that all the revenue realised from the sales of crude oil must domicile in Nigerian banks."

According to the indigenous firms, most Nigerian banks do not have the capacity to finance oil exploration and production activities considering the long-term nature of the business, hence passing the clause into law would bar them from accessing credit facilities from foreign banks.

Also speaking at the event, Secretary to the Government of the Federation, Yayale Ahmed, said President Umaru Musa Yar'Adua is committed to creating enabling environment for business to thrive in Nigeria.

He urged Singaporean companies to come to Nigeria and invest, stressing that there were several lucrative but untapped sectors in the country.

Chairman, Allied Energy Plc, Kase Lawal, said the firm had spent over $1.1 billion so far to bring the development of the oil field discovered in 1995 into its current state. Allied Energy is a member of the CAMAC Group based in Houston, Texas, United States (U.S.)

According to him, the FPSO alone costs the firm $1 million. He added that being a wholly indigenous exploration and production company in Nigeria, Allied Energy has been able to bring to bear its potential in capacity-building and skill transfer as the first indigenous oil and gas company to discover hydrocarbon in the deep water zone of Nigeria.

Lawal added: "We are pleased to celebrate the launching of the FPSO Armada Perdana. This FPSO will enable Allied Energy Plc to begin production on OYO field in OML 120 discovered in 1995 with proven oil reserve of 50,000,000 barrels. With first oil targeted for the fourth quarter of 2009, we are confident that this FPSO will enable Allied Energy Plc to continue our pioneering leadership as an independent oil and gas company, a stakeholder and contributor to the Nigerian and world economies and a worldwide supplier of energy resources.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Nigeria's bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.

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