A top U.S. Energy Department official will visit Nigeria next week in an effort to help to resolve ongoing instability in the petroleum-producing country.
Violence in Nigeria – the fourth-biggest exporter of crude to the U.S. – has cut crude production by nearly 750,000 barrels per day in recent months, fueling price spikes on world oil markets. Some of the violence is linked to armed criminal gangs. Rebel groups responsible for many of the attacks on infrastructure are demanding compensation for environmental damage, an end to government corruption, and social and environmental reform.
Karen Harbert, the Energy Department’s assistant secretary for policy and international affairs, will consult with oil company executives and senior officials in the newly elected Nigerian government in Abuja.
“They have a tremendous amount of oil offline,” Harbert told a policy forum at the Center for Strategic and International Studies earlier this week. “We’d like to have much more detailed discussions with Nigeria about some of the problems, talk with some of the companies, and to try over the short to medium and long term, find a way back to regularized supply from Nigeria,” she said.
“The global market is figuring in a price for that lost capacity, so it’s in everybody’s interest to get that capacity online and the security situation under control,” Harbert said.
Harbert didn’t expect to deliver any specific policy or program, but said she would discuss potential ways to resolve the escalating crisis with the government and the oil companies.
Nearly 200 foreign workers have been kidnapped in Nigeria in the last year and a half. Violence and the abduction of workers have caused companies to cut production to about a third of the country’s output capacity.
Harbert said the government needs the revenue from the capacity that is currently offline to meet some of the demands from rebel groups, “but they can’t meet the revenue because they can’t get the oil out of the ground because of the insurgency.
“I don’t have any concrete deliverables to come out of it, except for what we hope to be the beginnings of a far-more-robust discussion with the leadership in both the private sector and the public sector in Nigeria,” she said.