Nigeria’s new president Goodluck Jonathan could help pacify Nigerian rebels who have long made Nigeria a treacherous place for oil companies, and he knows it.
That’s because he’s the first Nigerian president who hails from the ethnic minority in Nigeria’s oil-rich Niger Delta, where all the trouble is.
Even while serving as just acting president, he already met with international oil executives on Thursday to plan Nigeria’s oil future.
Under the peace program that began last summer, the Nigerian government has essentially paid militants to lay down their arms. However, the delta’s main militant group recently called off its cease fire because of its unhappiness over how little money the government is putting into the region.
Wale Tinubu, chief executive of Oando PLC, Nigeria’s biggest nonstate energy company by revenue and oil production, said he thinks Mr. Jonathan’s ascent to power could spur the reconciliation process between the government and militants.
“Jonathan will make a renewed push towards peace in the Delta and I do believe that will reassure investors in the oil industry,” said Mr. Tinubu who wasn’t at Thursday’s government meeting.
Peace could yield enormous dividends. Nigerian oil production could rise as much as 50%:
U.K. consultants Wood Mackenzie estimate that Nigeria’s actual oil production could hit three million barrels a day by 2016 from just over two million day currently, representing a sharp revision downward from projections a few years ago.
For Saudi Arabia and OPEC (of which Nigeria is a member), new production capacity in cash-hungry nations (such as is happening in Iraq), will only make efforts to restrict oil production even harder than they currently are.