Issues Affecting U.S. Investment in the Petroleum Sector
GGD-93-16: Published: Nov 20, 1992. Publicly Released: Dec 21, 1992.
- Full Report:
Pursuant to a congressional request, GAO reviewed certain aspects of Nigeria's petroleum industry and issues affecting U.S. investment in Nigeria's petroleum sector, focusing on: (1) recent trends in Nigeria's oil production, exports, and reserves; (2) primary factors affecting Nigeria's ability to meet its production capacity and reserve goals for 1990 through 1995; (3) Nigeria's petroleum-related investment reforms and U.S. oil companies' response to those reforms; (4) factors discouraging or encouraging U.S. investment in Nigeria's petroleum sector; and (5) the efforts of the U.S. government and international organizations to support trade with and investment in Nigeria's petroleum sector.
GAO found that: (1) from 1987 to 1991, Nigeria's oil production increased 54 percent; (2) since 1990, Nigeria has raised its reserves 25 percent; (3) in 1990 and 1991, the Nigerian government allocated new acreage for exploration and production by foreign oil companies; (4) in 1991, the Nigerian government revised the memoranda of understanding with foreign oil companies to provide monetary incentives for increased exploration and production; (5) factors that U.S. oil companies identified as discouraging foreign investment in Nigeria's oil sector included inadequate incentives to enter into proposed production-sharing contracts with the Nigerian National Petroleum Corporation for new acreage, a Nigerian-imposed limitation on the use and hire of foreign workers, and bureaucratic delays in getting supplies into and out of Nigeria; and (6) U.S. and international agencies supported trade with and investment in Nigeria's oil sector by financing an $855-million gas condensate project.