Page 12 - Nigeria one mag 4 edition en
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At the height of the Niger Delta Militancy in 2016, the
Niger Delta Avengers intentionally targeted unsecured
Nigerian oil pipelines to force the government to
distribute higher percentages of energy revenue to
communities. These deliberate, strategic and
concentrated attacks on Nigerian oil and gas
infrastructure resulted in an estimated loss of 2.5
trillion naira, or $4.2 billion in current inflation rates.
The significant shrinking of Nigerian energy supply
due to hydrocarbon theft, political corruption, and
violent militias, deter both foreign and local investors
from actively investing their resources in the energy
industry. Thus, these domestic shocks and blow to the
energy sector result in a shortage of necessary
investments for modernizing energy output and
expanding existing energy infrastructure networks to
provide for growing domestic demands.
While Nigeria continues to battle with physical
security challenges concerning its energy depots in
the Niger Delta region, a dearth of critical
infrastructure is resulting in other security dilemmas
on the demand and supply sides of the Nigerian
energy sector. In addition to oil theft, Nigeria’s aging
infrastructure is making a bad problem worse as it
severely disrupts potential supply expansions of
energy infrastructure meant to meet domestic
demand. Roughly 70% of the population, around 200
million Nigerians, do not have access to sufficient
Oil well, illustrative image
electricity supply, while those who have some access to
electricity usually have frequent blackouts, and postponement on investment in the industry as a
consistent power interruptions. As such, the average result of poor returns, and excessive cost overruns
Nigerian has had to resort to self-power generation in due to price controls across the state-owned energy
order to meet his personal energy demands. enterprise that has the responsibility of overseeing
To meet the increasing energy demand for domestic Nigeria’s energy supply.
consumption, Nigeria has had to import refined Environmental related concerns have contributed
petroleum products, Nigeria has diversified its fuel immensely to hinder the success of the energy sector
imports (kerosene, gasoline, lubricating oil) from in Nigeria. In the last three decades alone, between
Belgium-Luxembourg ($4.7B), the Netherlands 1975 and 2005, the Nigerian government recorded an
($4.24B), the United Kingdom ($900M), Norway estimated 7,200 oil spills, another 1,765 spills have
($700M), and South Korea ($561M). Consequently, occurred since 2008. 15,000 tons of crude oil was spilt
Nigeria is the only OPEC member that is totally into River Niger in 2010, there was 75 oil spills in
dependent on the importation of refined petroleum 2018, and 125 another in 2019. The environmental
products to meet its domestic energy needs. Currently, disaster caused by the oil spill in the Nigerian energy
Nigeria continues to operate only four refineries sector is closely associated with the lackadaisical
which have failed to operate at full capacity for more attitude government which fails to hold the
than two decades and the newest of them, more than multinational energy companies and Nigerian
40 years old. These inherent institutional weaknesses corporations accountable to environmental standards
significantly contribute to high inefficiencies in and protections, because Nigeria is seriously
energy production in the oil sector, causing long-term dependent on revenue from the oil and gas sector.
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