02-04-04

West Africa's rich oil fields could be tapped if Nigeria sticks to its promises of transparency after years of chaos, a Washington think-tank says.

By 2010, chances are high that West Africa's oil production will hit 5.3 mm bpd, up from 3.4 mm bpd, said a PFC Energy study presented at the Centre for Strategic and International Studies. That will be less than 10 % of the world's production by the end of the decade, but the yearly value of that oil would be $ 43 bn, at an average price of $ 22.50 per barrel, PFC Energy said.

Nigeria and Angola look to be the top beneficiaries of oil production in West Africa, with Angola right behind Nigeria's possible take of $ 43 bn.

"One of the poorest countries (being Nigeria)... oil money simply disappeared into an opaque box" said Stephen Morrison, director CSIS Africa program. "Lack of transparency is a serious issue that has to be tackled," Ngozi Okonjo-Iweala, Finance Minister, of the Federal Republic of Nigeria, said at the conference.

She referred to sweeping anti-corruption reforms launched by President Olusegun Obasanjo, re-elected a year ago promising to cut poverty and grow wealth. The earliest results of the campaign yielded $ 600 mm in savings over bloated public-sector contracts, she said.
Oil revenue transfers to the federal, regional and local levels will be done with total transparency and published on a website, she said. In 2002, the United States imported 621,000 bpd from Nigeria and 332,000 bpd from Angola.

"Transparency is important not only for a good development policy but also for a good energy security policy," said Alan Larson, undersecretary for economic, business and agricultural affairs at the US State Department. He also said transparency "is not something we have to impose but something ministers are leading at home."

The finance minister was proud to present Nigeria's "home-grown program," of which she said "putting an IMF label on it will kill it."

The government of Lagos asked the International Monetary Fund for a close look at the anti-corruption reforms, she said, adding that the IMF will report on the quarterly results. Okonjo-Iweala said that the impact of oil revenues on each Nigerian would be small, just $ 600 a year.

"Debt service takes one-third of oil revenues," she said, asking the Group of Eight of the world's richest countries to show their understanding by reducing the debt. "I think creditors are going to welcome the tremendously new approach in Nigeria because it's something needed for government credibility," Larson said.

Source: Agence France Presse