Nigeria's Oil Seems Safe From West's Sanctions
US envoy, in Africa, raises little hope for tougher steps
CAPE TOWN, SOUTH AFRICA — United States Secretary of State Warren Christopher, on his first trip to Africa, has mentioned the possibility of harsher measures against Nigeria's military rulers to pressure for democratic change. But few people expect sanctions against the African giant's vital industry: oil.
After Nigeria hanged dissident writer Ken Saro-Wiwa in November 1995, Western nations threatened to retaliate with an oil embargo, but it never materialized.
The risk that oil sanctions could bring unrest to Africa's most populous country - and its neighbors in the unstable region - has convinced many governments that oil, which earns Nigeria 90 percent of its export revenue, should remain untouched.
"I think oil sanctions were a very serious threat last year," said Victor Oyofo, manager of production and geoscience at Mobil Nigeria. "But now we are hearing less of such a threat. I think many people now believe sanctions are not the right policy."
His view was echoed repeatedly at an international conference on African oil held this week in Cape Town, where Nigeria was one of the major topics.
Sanctions - if carried out effectively - would have a major impact on Nigeria as well as the American oil firms operating there, which include Mobil, Chevron, Texaco, Exxon, Amoco, and Conoco.
The US imports about 40 percent of Nigeria's estimated oil exports of 1.6 million barrels per day, which in turn accounts for about 7 percent of American oil needs. Much of Nigeria's crude oil is of the Bonny Light variety, which traders covet for its high quality.
Western countries imposed limited sanctions after elections in 1993 were aborted, casting doubt on a promised return to civilian rule. The measures included an embargo on military hardware and denial of entry visas for military personnel and government officials.
Further talk of sanctions came to a head after Mr. Saro-Wiwa's execution, when the US, Canada, and the European Union countries recalled their ambassadors.
This initially tough stance also included the temporary suspension of Nigeria from the Commonwealth of former British Empire countries. By March 1996, recalled diplomats had returned to Lagos and the Commonwealth nations, except for Canada, had softened their stance.
Nigerian lawyer Asue Ighodalo, in a paper presented to the conference, maintained that although the US State Department periodically indicated that it had not closed the topic of oil sanctions against Nigeria, such statements have become increasingly muted.
He attributed inertia over oil sanctions to various factors, including the inability to mobilize United Nations support for such measures and pressure by powerful oil companies, who pointed out to their home governments that there was a strong likelihood that their assets in Nigeria would be expropriated.
There were also worries about the effect of oil sanctions on prices while UN sanctions against Iraq remained in place - and a fear that Nigeria would develop a close commercial relationship with Iran, China, and Russia and cut off its market for Western imports.
Nonetheless, the Clinton administration has continued to be concerned about not only human rights abuses in Nigeria but also drug trafficking and corruption. Mr. Christopher began his five-nation tour this week to sub-Saharan Africa saying Washington wanted to step up pressure on Nigeria to move more quickly on democratic change.
The timing of his comments was deemed odd by some analysts, who noted that the regime has in recent weeks loosened restrictions on some opposition parties and figures, albeit in a limited fashion. Several analysts say Christopher's trip is aimed not only at drumming up African support to block the reelection of UN Secretary General Boutros Boutros-Ghali but also at wooing the African-American vote ahead of US presidential elections.
Some analysts have speculated that Christopher's proposal refers to measures including freezing Nigerian assets in overseas accounts and imposing restrictions on new investment in Nigeria.
Even with these measures in place, Nigeria's mighty oil industry would continue to flourish, experts say.
Investment in the oil industry estimated at $3.6 billion in 1995 is expected to rise to $4 billion this year, said Patrick Merino, managing director of the Africa Development Consulting Group, based in Lagos, Nigeria's capital. Some 40 percent of the investment is foreign money.
Industry analysts say it is likely the government could achieve its aim to increase daily oil production capacity to 2.5 million barrels and its proved reserves to 25 billion barrels by 2000.
Investment is being helped by two new laws promulgated in 1995 that loosened regulations on foreign investment. Since then, oil companies have shown increased interest, said Jumi Kola Balogun, a Harvard-trained lawyer based in Lagos who specializes in the Nigerian oil sector.
"This sets the stage to make Nigeria even more attractive," she said.