There are indications that the United States may halt crude oil import from Nigeria by 2022, as it moves closer to becoming a net export of petroleum products.
The United State Energy Information Administration (EIA) has projected that the United States will become a net energy exporter in 2022 in the newly released Annual Energy Outlook 2018, primarily driven by changes in petroleum and natural gas markets.
Nigeria saw a significant reduction in the US imports of its crude in recent years, starting from 2012, following the shale oil production boom.The U.S. imported a total of 28.53 million barrels of crude oil from Nigeria in the third quarter of last year, up from 18.88 million barrels in the same period in 2016; 10.13 million barrels in 2015; 5.10 million barrels in 2014; and 21.23 million barrels in 2013.
The Minister of State for Petroleum, Dr. Ibe Kachikwu said recently that Nigeria would explore the possibility of selling crude oil to African markets.He said:
“Nigeria has to begin by looking at the country first. What do we do to encourage local companies to be able to compete in Africa? It is along these lines for example, that we have started product or sector specialisation which are the areas where we have the most competitive advantages.”
According to EIA, the transition from net energy importer to net energy exporter occured even earlier in some sensitivity cases that modify assumptions about oil prices or resource extraction. Sensitivity cases with less energy production project that the United States will remain a net energy importer through 2050.
It stated: “The transition of the United States to a net energy exporter is fastest in the High Oil Price case, where higher crude oil prices lead to more oil and natural gas production and transition the United States into a net exporter by 2020. In that case, higher crude oil prices also result in higher petroleum product prices and lower consumption of petroleum products, driving decreases in net petroleum imports.
“In the High Oil and Gas Resource and Technology case, with more favorable assumptions for geology and technological developments, the United States becomes a net exporter in 2020, and net exports increase through the end of the projection period. In cases with relatively low oil prices or less favorable assumptions for geology and technological developments, U.S. net energy trade still decreases, but the United States remains a net energy importer through 2050.
“In energy equivalent terms, the United States imported about 27 quadrillion British thermal units (quads) of energy in 2017 and exported 18 quads, which resulted in 9 quads of net imports. In 2017, the United States imported about 11 quads of petroleum and other liquids and exported two quads of coal and coal coke. U.S. natural gas trade in 2017 was nearly balanced between imports and exports, and net electricity trade with Canada and Mexico was relatively small. Petroleum and natural gas account for most of the changes EIA projects in U.S. energy trade.”
EIA said that U.S. net petroleum trade—crude oil, petroleum products, and natural gas plant liquids—has fallen in recent years, reaching 3.8 million barrels per day (b/d) in 2017 based on data through November.
He expressed concern that the country has not been able to capture the African terrain of the market, adding that the market must be captured in terms of contract awards, whether in crude, investment or other formulations.