NIGERIA - Part 3 - Exports & Logistics.

Nigeria's exports of crude oil now are averaging about 1.715m b/d, according to an APS source in Lagos. In addition, the country exports about 95,000 b/d of condensates produced offshore by ExxonMobil.

Of the 2.19m b/d of crude oil and condensates being produced, only about 90,000 b/d go to a refinery at Port Harcourt to meet domestic demand. The remaining 200,000 b/d, unaccounted for, are crudes being stolen. Oil theft is one of the problems the Nigerian government is yet to resolve. Shell has complained that it has been losing 100,000 b/d in crude oil thefts. To meet local demand, Nigeria imports petroleum products at market prices and sells them to the domestic market at subsidised prices. Because only one of its refineries has been in operation in recent weeks, there are no Nigerian exports of oil products and imports of crude oil have stopped.

The majority of Nigeria's crude oil exports are destined for markets in the US and Western Europe, with Asia having become an increasingly important market as well. Crude oil and fuel oil exports to the US in the first five months of 2003 totalled 819,000 b/d. They peaked in March 2003 at 1.012m b/d. In 2002, exports of Nigerian crudes and fuel oil averaged 621,000 b/d. Nigeria was the fifth largest crude oil exporter to the US in 2002, behind Saudi Arabia, Mexico, Canada and Venezuela.

The state-owned Nigeria National Petroleum Corp. (NNPC) estimated late late year that it earned $4.15 bn from crude oil exports from January to September 2002. (The EIA estimated that Nigeria earned $17.2 bn in oil export revenues in 2002).

Shell's 40-year-old Bonny Island oil export terminal is in the process of being upgraded and expanded. When completed, the facility will be able to export 1.5m b/d. The $600m project is to be completed in 2006.

Illegal fuel siphoning as a result of a thriving black market for fuels has increased the number of oil pipeline explosions in recent years. The most serious disaster was the October 1998 Jesse fire in which over 1,000 people died. In July 2000, a pipeline explosion outside the city of Warri caused 250 deaths. An explosion in Lagos in December 2000 killed at least 60. NNPC reported 800 cases of pipeline vandalisation from January through October 2000. In January 2001, The Nigerian navy announced plans to clamp down on arson attacks on oil facilities following the loss of about $4 bn in oil revenues due to vandalism. The federal government has ordered the navy to sink any ship conveying crude oils that cannot be accounted for. The government in 2002 estimated that as much as 300,000 b/d of Nigerian crudes were "illegally bunkered" (freighted) out of the country.