THE ROLE OF OIL PRODUCTION ON NIGERIA FOREIGN POLICY

Background to The Study

Nigeria is blessed with abundant natural resources of which crude oil plays a major role. According to Nigeria Bureau of statistics reports of 2016, Nigeria is the 8th largest producer of crude oil in the world and at present, the largest in Africa overtaking Angola just recently. Nigeria has an economy that is dependent upon its oil sector. According to CBN report (2017) oil and gas exports accounted for more than 91.6% of export earnings and about 69% of the Federal Government revenue, as well as generating more than 40% of its GDP. It also provides 95% of foreign exchange earnings and about 69% of government budgetary revenues. Nigeria produce 90 million tons per year. And with an economy based so explicitly around one product, it is almost impossible for it not to affect everything about Nigeria’s political structure and thus, shaped its every decision. In addition, the tremendous growth in oil earnings has influenced significantly on Nigeria’s foreign policy.
Foreign policy or foreign affairs policy are those advantageous strategies a country employs to protect its national interest and achieve specific goals for the benefit of its citizenry and the country in general.The word foreign of course implies that these strategies are taken in relation to other countries, hence the equivalent term “Foreign Relation.

Nigeria, in its foreign relations have emphasized African issues and have made it the cornerstone of its foreign policy. Nigeria uses its enormous resources from crude oil to play a vital role in the independence of countries like Angola, Zimbabwe, Namibia, and South Africa among others. Nigeria also contributed financially to the frontline states of Angola a fellow Organization of petroleum exporting countries (OPEC) country during it civil war in 1974, Zambia, Tanzania, and Mozambique. Nigeria also played a decisive and active role in African crucial issues such as the participation in peace keeping operations in Congo, Liberia and Sierra Leone under ECOMOG etc. Also, Nigeria has contributed substantially to the establishment of the OAU now AU, ECOWAS among several contributions through resources accrued from crude oil. However, these contributions and availability of the crude oil in Nigeria connect the country to international energy market, where powerful nations like US, India, China, and UK among several others through economic diplomacy transact businesses with Nigeria which result to achievement of its foreign policy objectives.

Against the foregoing, Nigeria whose export rely on crude oil is involved with numerous countries in terms of crude oil exchange. Among these countries are Nigeria and United States. In recent years, according to Cetral Bank of Nigeria (CBN) report 2017, Nigeria is an important oil supplier to the United States. For the last nine years, the United States has imported between 9-11 percent of its crude oil from Nigeria; however, United States import data for the first half of 2012 shows that Nigerian crude is down to a 5 percent share of total United States crude imports. According to the International Energy Agency, in 2011, approximately 33 percent of Nigeria’s crude exports were sent to the United States, making Nigeria its fourth largest foreign oil supplier. Although total crude imports into the United States are falling, imports from Nigeria have declined at a steeper rate. According to the CIA World Fact book, Nigeria’s main export partners are the United States, India, Brazil, Spain, France and the Netherlands. SHELL, an oil company of United States has been working in Nigeria since 1936, and currently dominates gas production in the country, in the Niger Delta, which supplies most of Nigeria’s gas resources, and also houses most of Shell’s hydrocarbon assets. This research will examine the influence of crude oil on Nigeria’s foreign policy towards Nigeria and United States. Over the last decade, the two countries have become the largest importers of Nigeria’s crude oil.