The considerations have now become political. Today, the production is safer in the deep offshore. The ‘new frontier’ of Nigeria’s oil which is near the coast or in the Delta is a veritable war zone for oil where militants declared war against major oil players and foreign authorities. Several facilities of major oil companies have been under attack. The Nigerian military has come swooping down on villages of suspected insurgents, killing thousands of people.

All the chaos is for the ‘control of the creeks, lowland rainforest, and mangroves from which flow 80 percent of Nigeria’s oil.’

The oil multinationals say that the ‘state of emergency’ has led them to suspend deliveries of crude oil without incurring penalties. Chaos has plunged oil production to 1.7 million barrels per day from the erstwhile production scale of 2.6 million barrels per day. Nigeria can produce more than 3 million barrels on a daily basis. But security continues to deteriorate.

Underdevelopment feeds the endemic violence. The government agency created to foster economic and social projects has so far been unable to carry out its efforts.

Underdevelopment also fuels widespread corruption. The local potentates and military authorities want to fill their pockets before the general elections of 2011. It is estimated that 5 percent of Nigerian production is stolen to be sold to markets in West Africa.

With its seabed rich in oil, Nigeria remains a strategic source for the consumer countries. The United States and Europe are operating in the Gulf of Guinea as a means of reducing their dependence on oil from the Middle East. Western majors are increasing their presence. So are companies from emerging economies such as China, Brazil, and Russia.

The Nigerian government has seen all the geoeconomic advantage that could be learned. The Parliament acted on the Petroleum Industry Bill. Ties are being cut between the State and the national oil company (NNPC) to give the latter more autonomy in creating joint ventures with foreign partners so as to appeal to capital markets and to develop new deposits.

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Via The Huffington Post