Royal Dutch Shell: Nigeria Suffers After Closure Of Shell‘s Pipeline

Nigeria is amongst those members of the Organization of Petroleum Exporting Countries (OPEC) which have suffered the most due to the US shale boom. The oil boom has allowed the US to reduce its dependability on the OPEC for oil imports. Higher oil production coupled with lower demand has led to a fall in the oil price. Since June, crude price has plummeted over 32%.

The quality of Nigerian crude oil is quite similar to the shale oil that is now produced in the US region of North Dakota, and consequently has helped to lower US’ demand for oil imports from Nigeria. This has become a major source of concern for Nigeria as the nation is currently not exporting any oil to the US, compared to exports of 1.3 million barrels per day (bpd) since February 2006.

Moreover, Nigeria’s Niger Delta has been affected by major thefts, causing many foreign investors to divest their assets and leave the region. Royal Dutch Shell plc as a pre-cautionary measure also intends to sell all assets and leave the region. According to sources, the Nigerian economy suffered from thefts worth $35 million every day and Shell reported to have lost a massive $1 billion in 2013 alone.
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