Nigeria admits oil revenue wasted

Nigerian energy officials acknowledged that despite generating hundreds of billions of dollars in wealth, the country's oil industry has done little to enhance the lives of the Nigerian people.

Speaking to private sector energy officials at a conference in Lagos, Nigerian Petroleum Minister Odein Ajumogobia said he regretted the failure by the federal government to improve the lives of Nigerians, particularly those in the oil-rich Niger Delta, where some 70 percent of the population lives on less than $1 a day.

The minister also expressed regret that Nigeria's National Petroleum Corporation, or NNPC, has not procured a larger percentage of the industry dominated by foreign oil interests.

The NNPC has less than a 20 percent stake in oil and gas projects in Nigeria, said Ajumogobia. The goal for Nigeria's energy sector, he said, was to obtain a 70 percent stake by 2010.

Nigeria's energy sector is the subject of much scrutiny, both at home and abroad, considering the overwhelming poverty and rampant corruption plaguing the West African country.

The minister's remarks, some speculated, are an indication that at least some officials recognize the political graft and wastefulness that have plagued the industry.

"I think this is yet another indicator why there is greater need for transparency in the oil sector," said Emira Woods, co-director of Foreign Policy in Focus at the Institute of Policy Studies.

High unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered some of the region's youth and incited them to take up arms, forming militant groups such as the Movement for the Emancipation of the Niger Delta.

The increased violence has caused Nigerian oil output to decline by 650,000 barrels per day, the West African country's vice president noted last month.

A recent spike in clashes between militants and Nigerian soldiers and private security has cost the country about 115,000 barrels per day in output, Nigerian energy officials admitted last month.

All losses incurred by continuing attacks by armed militant groups on oil and gas installations in the Niger Delta are costing the country almost $68 million a day in lost revenue, according to government estimates.

In September a "peace council" commissioned to discuss ways of ending the violence in the delta proved fruitless.

MEND warned that the recent violence was just a preview of its intended escalation of the conflict raging in the delta.

"Oil companies are warned to move out their workers within the next 24 hours, because a hurricane is about to sweep through oil installations in the entire Niger Delta region," read a statement in September by the self-styled MEND spokesman known as Jomo Gbomo.

"This may be the beginning of a full-scale oil war."

Even the recently announced creation of the Niger Delta Ministry to tackle the ongoing concerns of widespread poverty in the region did little to placate MEND and other militant groups in the region angered with the country's handling of oil wealth.

Meanwhile, Ajumogobia expressed concerns Wednesday that lower global oil prices would hinder Nigeria's ability to meet its federal budget for the year.

"Nigeria would be comfortable to have the oil price at $80, in view of the production cost and in view of the fact that Nigeria is looking for more money to finance its budget," said the minister.