By Sonny AtumahWith the Yom Kippur War of 1973, the United States banned the export of crude oil to any part of the globe except refined petroleum products. For memory sake the Yom Kippur War also known as the Arab –Israeli War elicited an embargo of oil by Arab members of the Organisation of Petroleum Exporting Countries (OPEC) on October 17, 1973 against the United States for its support of Israel during the war.The decision was in retaliation for the US decision to re-supply the Israeli military. Between 1973 and 1974 when the embargo lasted, oil prices almost quadrupled with skyrocketing costs of goods and services in the United States. Canada, Japan, the Netherlands, the United Kingdom, Portugal, former Rhodesia and apartheid South Africa were all victims of that oil embargo.In Nigeria, it was the period of the oil boom when crude price rose from $17 to $55 per barrel; remember the popular Udoji Salary Award and how ‘’we never knew what to do with money’’? Different strokes for different folks you may say; it is all about petrodollar which we enjoyed then. We are now on the reverse gear; paying back in the petroleum crossfire between the Arabs and America. We seem to be hawking our crude for buyers in Europe.Since that war, Saudi Arabia gained much wealth and power, and for about four decades the United States had a cut throat competition with this oil heavy weight and OPEC leader, Saudi Arabia. Saudi Arabia became a price giver while America became a price taker. That devastating blow dealt on America empowered them to put on their thinking caps on how best to solve the problem of over reliance on crude oil imports.President Richard Nixon in response in November 1973 promised the nation that America would be energy independent in 10 years but that was not to be until recently. With the United States reaching their petroleum peak in the early 1970s, the Federal government invested heavily in supply alternatives.Research appeared to have given America a breakthrough in unconventional oil in what is now the shale oil and gas revolution. The effort yielded the technology of hydraulic fracturing and horizontal drilling to shale gas formations. With the shale revolutions experts are now viewing America as the’ new Saudi Arabia’ as far as oil and gas is concerned.President Barack Obama in the State of the Union Address to Congress in 2012 echoed this when he said: “We have a supply of natural gas that can last America nearly 100 years.” President Obama had in 2013 said: ‘’we should strengthen our position as the top natural gas producer because, in the medium term, at least, it not only can provide safe, cheap power, but it can also help reduce our carbon emissions’’Energy expert Daniel Yergin in a contribution to the Politico Magazine said that: The increase in US oil production since just 2008 is greater than the entire output of Nigeria, one of the OPEC producers and more than Iran’s entire exports prior to the sanctions that have sliced its exports levels roughly in half since 2011. Indeed without the increase in US oil production, it is very hard to see how the oil sanctions on Iran could have worked’’.Nigeria, the 7th producer in OPEC, produces just a little over 2 mbpd of crude that is largely light and sweet. Our crude is largely low in sulphur and yields generous amount of profit making refined products as PMS, DPK (household kerosene and aviation turbine kerosene) and diesel. Our crude has been the sweetheart of refiners until recently when America made an in-road in shale.The beautiful bride is now old and no more the toastmistress of America that until 2010 imported between 40 and 50 percent of Nigeria’s oil. By July 2014, the US had zero import of Nigeria’s crude even when she imported crude in excess of 569,000 barrels per day. Nigeria’s Bonny Light, Agbami and Qua Iboe crude was replaced by the Azerbaijan light sweet in what watchers term a shadowy oil partnership with a ‘former’ ally of Russia.Opinions however differ on why we lost our biggest buyer. Some said the American shale oil is similar in quality to our dear own bonny light while others impugned political motives when former President Goodluck Jonathan signed the anti-gay law in 2013. Whichever one it is, we lost that big market that burgeoned in four decades as America assert her authority on issues of politics and geopolitics of petroleum.With stumbling European economies that imported Nigerian crude in 2014, by about 45 percent, crude demands are again on the low. Reports are that Nigerian crude is floating on the seas and in storage tanks with no destination because there is no refinery demand in Europe. Oil Price Intelligence reports indicate European two-year high in the world’s largest oil trading hub, the Amsterdam-Rotterdam-Antwerp (ARA).Storage levels have spiked in June at 60.6 million barrels in the Dutch and Belgian ports with lots of the supply coming from Africa and especially Nigeria with no interested buyers. Implications are that this oversupply in storage may force down the price as it happened in the United States earlier in the year, which stabilised after drawdowns in the east coast Atlantic refineries.The world glut continues with production exceeding demand by about 2million barrels per day according to the International Energy Agency. Europe is also seeking market elsewhere as the EU and South Korea have signed free trade pact for North Sea crude supplies.Asia is now the new direction, with India holding sway. But the world’s largest refiner, the Reliance Industry Limited in Jamnagar, Gujurat, India is looking the way of Latin America and the Middle East for heavy crude which their complex refinery requires. State owned refineries like Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are still patrons of our crude.The second largest consumer of crude oil in the world, China is in alliance with our petroleum neighbour, Angola. China which is assuming leadership of crude oil import for the first time as a result of the American shale revolution prefers the Angolan crude because it is heavy and sweet; which is reported to be good for their (China) sophisticated refineries.We should now device means of reaching out to potential buyers in Asia. Iran which anticipates a lifting of sanctions by the United Nations of its nuclear programme, is already reaching out to Japan. Indonesia is seeking crude supplies from Iran. Iran. The fears are that the oversupply of crude from Iran may compound Nigeria’s precarious situation.For a country that depends a lot on crude exports, to have its crude idly away on storage terminals, Diplomatic shuttles are now needed to negotiate markets for Nigeria As President Muhammadu Buhari honours President Obama’s invitation to the White House on July 20, 2015 we hope matters of mutual and oil business complementarity would be at play to smooth out the rough edges of our bilateral relations. We need their super majors like ExxonMobil (Texas), Chevron (California) and Conoco Philips (Texas) to invest in the downstream sector of our petroleum industry.  They have been operating only in the upstream sector in Nigeria. President Buhari should give assurances of adequate legal and regulatory frameworks for security of investments. With low crude prices these companies are leveraging on downstream investments.We must articulate a position for bi-partnership strategy to curb oil theft in Nigeria which is making Nigeria to produce below its capacity of 2.5 million barrels per day. President Buhari should tell President Obama that New York is a major hub for money laundering of illegal oil proceeds. Nigeria should also demand for a repatriation of laundered money from other global financial hubs including London, Geneva, Singapore and elsewhere if it was not discussed in their meet at the G7 June meeting in Bavaria, Germany.As the 7th Oil exporting nation in OPEC, we have a comparable advantage in petroleum which with vertical linkages, we can diversify our economy. America for now holds the ace as a lift in export ban would put us in a quandary. Oil still remains the global leading fuel for energy.The present situation underscores our constant and consistent calls for downstream investments. With potentials for up to 6000 investment opportunities when we refine a barrel of crude, we should know that petroleum is strategic for energy, technology, skills, employment, income, investment, increased GDP and government revenue that we should not toy with. We are lucky the export ban on crude in the United States has not been lifted because of the disagreement between energy companies and manufacturers over whether natural gas should be allowed to be exported. One would imagine the consequences to Nigeria of the US crude exports, if stoppage of crude imports from Nigeria could affect us this way. Our petroleum resources managers must act now!

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Na wa ooooo

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