What Are The Effects of High Oil Prices On The Economy of Oil Exporter, a Case Study of Nigeria - Essay Example

What are the Effects of High Oil Prices on the Economy of oil exporter, a case study of Nigeria ABSTRACT Oil has placed Nigeria as one of the top ten oil producers in the world. The oil and gas industry situated in the Niger Delta has provided recoverable reserves which are the world’s largest. History elaborates the atmosphere of unrest that has carried down the tradition of disputes among the diverse tribal people. Conflicts, corruption and coups mar the peace of the area. The Niger Delta’s sedimentary basin has oil traps which contribute to the oil reserves. The oil exports provide 90% of the revenue of the government. As things stand, these reserves could last for more than forty years and could be a source of riches in Nigeria. However the risk that Nigeria takes by solely depending on oil and not finding another source of revenue is risky in the long run. Nigeria has able leadership in the Presidents but they have to go a long way to make oil their own ‘prize cow’. At present, foreign companies are exploiting the oil reserves. The paper elaborates more about the oil revenues and the ways in which these revenues have influenced the various activities of Nigeria. Viewpoints of researchers, authors and the media have been added. The oil prices and how they affect the economy of Nigeria has been discussed. What are the Effects of High Oil Prices on the Economy of oil exporter, a case study of Nigeria Introduction Nigeria is a powerful nation in national and international affairs (Nigeria, Oxford Business Group). Having gained independence from the British in 1960, Nigeria was an active participant in African politics and had a major role in UN and African Union missions across the nation. A rich diversity of peoples exists with 250 ethnic varieties. The landscape ranges from semi-arid desert in the northern regions and tropical forests towards the south (Nigeria, Oxford business Group). History is accompanied by the tales of frequent military coups and secessionist wars. The violence in the past appears to have been influenced by the demographic and geographic profile. Recent years have however led to a political stability unseen in its history. The GDP which is expected to cross 8% this year also conveys a rosy picture. The principal exports are oil coming to $ 20.7bn. It exports mainly to US and then India (Nigeria in Country profiles, 2007). Oil has made Nigeria a rich nation and the economy is growing fast. Nigeria has relied on the hydrocarbon sector for its largest revenues and exports since the oil boom in the 1970s. It is the largest oil producer in Africa and provides 11% of the US oil imports. Proven Oil reserves of over 39 billion barrels are present in this oil-rich country (Country Report Nigeria, 2007, p.2). Natural gas reserves are found to be over 100trn cubic feet. The oil and gas sectors provide 90% of the revenue to the government (Nigeria, Oxford Business Group) and 98% of the exports (Country Report Nigeria, 2007, p.2). Total dependence on oil has made Nigerians completely vulnerability to fluctuations in the oil price. Where does oil come from? Petroleum originates from the Latin word “petra oleum” which means oil from the rocks. Petroleum or oil refers to the hydrocarbon compounds which assume the state of a liquid when existing under specific pressure and temperature conditions at the surface (Kosinowski, 2002, p. 25). Oil wells were drilled in 1858 in Pennslyvania in the US and Wietze in Germany. The industrial evolution of oil exploitation started here. 40% of the total primary energy demand is provided by the crude oil. The tradable unit of oil is the blue barrel which has a volume of 159 litres. 7.35 blue barrels of oil is equivalent to one metric ton of crude oil. The oils drilled in various areas may have slightly differing physico-chemical properties and termed heavy oil, extra heavy oil, bitumen and other varieties. The oil which has low viscosity and volatile portions is called high gravity oil. The low gravity oil has properties which are just the opposite: high viscosity and low proportion of volatiles (Kosinowski, 2002, p. 25). Oil is obtained from the kerogen in sedimentary rocks. Marine basins, anoxic continental shelves and submarine fans are the places rich in oil. Detritus, plankton and other organic materials may accumulate in a period of 500 to 1000 years forming even a one metre thickness layer. The organic matter will be altered when microbiological and chemical reactions occur when the site is close to water. If oxygen is absent, the organic matter changes into kerogen which is the source for oil. Pressure and temperature in the buried strata leads to many processes starting with diagenesis going on to catagenesis which is the main zone for oil production. The process continues to metagenesis when gas is formed. The quantity and quality of crude oil will depend on the pressure and temperature within the strata and the type of kerogen formed. The strategic position of Nigeria to the Niger delta makes it a good source of oil. It has also flared solution gas which is liquefied into oil for export. Nigeria the country Nigeria has a population of 127.1 million and a low life expectancy of 44.1 years for men and 44.3 years for women. Adult literacy is 68 %. Its GDP is $570. Average annual growth is 3.8%. It gets its income from agriculture and manufacture other than oil. Nigeria is Africa’s most populous country and the continent’s biggest producer of oil. Geography The land area is 923,000 sq. km. and the coastline is 853 km. including a part of the Gulf of Guinea (Nigeria, Oxford business Group). Its neighbours are Benin to the west, Chad and Cameroon on the east and Niger in the north. The landscape, flora and fauna are in rich diversity. The Sahara is in the north. The Niger delta is in the south. and the savannah grasslands exist in the central part. The Niger and the Benue run across Nigeria to end in the Niger delta (Nigeria, Oxford business Group). The delta is an area of oil-rich sediment. Annual rainfall is about 381 cm. in the south and 64 cm in the north. Temperature variation is between 33oC and 20 oC. The temperature and humidity are both fairly stable. However in the north, daytime temperatures can go up to 39 oC. Seasonal frost is also seen. History After years of British Colonial rule, Nigeria attained independence in 1960. A federation was formed with three regional divisions each having a scope for self government (Nigeria, Oxford Business Group). In 1963, a change was made in the constitution and a federal republic with a few states was formed. The ethnic, religious and regional differences led to many military coups and a secessionist movement. A civil war lasted three years. The period of unrest was then followed by economic development and boosting of government revenue. All this was triggered by the booming of crude oil prices. A new constitution was established in 1979 which laid the foundation for the 1999 constitution (Nigeria, Oxford Business Group). Further turbulence was seen after 1979 and this led to the military Provincial Ruling Council being set up. This council was Nigeria’s main decision making body. Steps were adopted to shift the country back to fair elections. The first civilian Presidential elections were held and a previous military head of state, Olusegun Obasanjo, won the elections. A democratic Nigeria re-emerged. The main problems that were being faced in this regime were the slow degeneration of the infrastructure, a bureaucracy that was hopelessly inefficient and corrupt and a military which was reluctant to secede its power. Obasanjo tried to overcome the situation. He had the military rulers retired and recovered millions of dollars which had been illegally diverted (Nigeria, Oxford Business Group). The investigation of human rights issues was encouraged. Press freedom was permitted and state governors obtained more powers. The coups which were a frequent occurrence continued in isolated and economically sensitive areas. The conflicts were a cause of worry to the federal government. In 2007, a new leader, Umaru Yar’Adua, was elected. Politics Umaru Yar’Adua was formerly a chemistry teacher and was the Governor of Katsina for seven long years. As the new leader, he took a firm stand on corruption. Lost Government funds were recovered. Good Luck Jonathan took a proactive approach and encouraged economic development and attempted to reach greater liberalization and encouraged private sector involvement in the economy (Nigeria, Oxford Business Group). Muhummadu Buhari was a former military leader and had been posted in the different governments in different positions. He was tough against corruption. Ahuja is the capital. The Federalist system has 36 states. The president is the executive power, the head of state and head of government. There is a bicameral legislature (National Assembly) and a judiciary. The National Assembly has a 360 seat House of Representatives and 109 seat Senate. A multiparty system is prevailing. The President’s party PDP has 60% of seats in both houses. The opposition has only 25% of seats in the house. Nigeria believes in an Africa-centric foreign policy. It promotes “African unity, nonalignment, non-interference and regional economic cooperation” (Nigeria, Oxford Business Group). Being one of the main founders of the ECOWAS (Economic Community of West African States), Nigeria has contributed to the economic integration and harmonization of 15 West African states. It participates enthusiastically in the peacekeeping initiatives across the continent. Maintaining friendship with its neighbours, it withdrew its forces from the Cameroon border after a judgement was passed in favour of Cameroon over the Bokassi Peninsula dispute. Internal disputes are always smouldering. The relationship between the tribes produces tensions in the area (Country Report, Nigeria, 2007, p.3). The government has not been able to allow all sections of the society benefit from the oil riches. This has given rise to the grouping of militants and an armed struggle in the Niger area with the government. The militants call themselves the Movement for the Emancipation of the Niger Delta (MIND). Frequent sabotages and kidnappings have actually reduced the oil output by 25% in 2006. The US provides diplomatic protection. No serious external threats exist. Though all infrastructure exists for a good political system, the reality is that even elections are rigged and underhand tactics employed to put down opponents. The Presidential elections of April 2007 saw the apparently peaceful transition of one civil government to another (Country Report Nigeria, 2007, p.3). The elections were flawed and the voting was rigged. The PDP ensured that the opposition candidates were charged with corruption under the anti-corruption commission. Many people challenged the election of the president Umaru Yar’ Adua. However he was sworn in. Tribal lines are still existent in Nigerian society. Each group therefore needs to have someone in an official post to get anything done for themselves. Corruption is rampant (Country Report Nigeria, 2007, p.3). Social structure Nigeria has real hard challenges in this aspect. 90% of the people are living on less than $2 a day. The GINI index shows 43%. This is a measure of the income inequality. Education is insufficient. Healthcare is poor and inadequate with a low life expectancy as mentioned on page 1. The mortality rate for the under-5 is 200 per 1000. Public social expenditures have zoomed. Resolution or rapid progress for social issues is hardly expected to take off due to the large scale extent and the inefficiency of the government. ((Country Report Nigeria, 2007, p. 3). Economy With GDP over 8%, Nigeria’s economy is growing fast. Industry contributes to more than half of the GDP value while services contribute to 30% and agriculture 17%. The debt reduction policies reduced successfully from 36% in 2004 to less than 4% in 2007 (Nigeria, Oxford Business Group). However there has been a drawback in that Nigeria had to borrow money to the tune of multibillion dollars for their infrastructure further causing an increase in the inflation already at 8.5%. The federal budget for 2008 was at 23 billion dollars. Recurrent expenditure came to 11 billion dollars, capital expenditures came to an additional 7.4 billion dollars and debt service was 3.2 billion. Most of the state’s expenditures were spent in the Niger Delta for security and stability measures. Education had 8%, transportation 7% and energy 5% of the budget (Nigeria, Oxford Business Group). The Hydrocarbon Sector or Oil and Gas The success of the oil and gas industries has led to the upstream method of spending. The security issues and a hostile relationship with the local communities in the Niger Delta have put up obstacles in the way of production. The outcome is that the production has dropped below the country’s OPEC quota. The problem is partially compensated by the agricultural sector which provides two thirds of the employment opportunities even though the investment for agriculture has exhibited a decline. The non-oil GDP growth is seen in cocoa, groundnuts and palm oil which are the traditional chief agricultural exports (Nigeria, Oxford Business Group) rubber and timber (Country report Nigeria, 2007, p.2). These constitute only 2% of exports. The Banking Sector Significant reforms have improved the banking sector after 2006. The Central Bank of Nigeria led a campaign to promote consolidation and governance control. With the implementation of new policies, the number of banks decreased while the minimum requirements of capital were raised (Nigeria, Oxford Business Group). There are now only 25 banks of which 4 are owned by foreigners and all listed on the stock exchange exhibiting their transparency (Country Report Nigeria, 2007, p.3). Intensive re-development has favoured the telecommunication sector. The Nigerian Telecommunications monopoly has been privatized. Five mobile operators are hosted by Nigerian Telecommunications. These include Qatar-based Q-Tel and the Emirates-based Etisalat (Nigeria, Oxford Business Group).The Government owns transport infrastructure. However domestic private air carriers have helped to improve the transport facilities between cities (Nigeria, Oxford Business Group). Macroeconomic performance of oil-rich Nigeria. Nigeria is producing 2.5 million barrels of oil per day (Country Report Nigeria, 2007, p.2). Surprisingly, most of the population lives below the poverty line. Nigeria is a low income country by World Bank standards and its GDP per capita is USD 810 as in 2006. The economy of this country depends on the extraction of crude oil and its export. The present oil reserve of 39 billion barrels could be further expanded with off-shore fields which are being developed. The large investments that are required for the expansion of oil production are usually provided by foreign investors. However the unrest and volatile atmosphere in the Niger Delta has evolved into a long term problem. This is warning off the foreign investors (Country Report Nigeria, 2007, p.2). The oil happened to provide everything for the Nigerians for decades that they did not feel the need for a diversification of the economy. The Nigerians have become totally dependent on the oil and exhibit vulnerability to fluctuations in the oil price. Though Nigeria provides the crude oil, they have no means of refining the oil for fuel in their own country. Their fuel is all exported. The growth in economy in 2006 by 5.6% was solely due to the non-oil sector which grew by 8.9%. Of the non-oil sector, the agricultural sector contributed the most. 2006 saw unrest again in the Niger Delta reducing the contribution by the oil sector by 4.7% (Country Report Nigeria, 2007, p.2). Economic growth in the non-oil sector will be supported by the government in the future and the oil sector performance would also improve. The unrest in the Niger would subside due to increased production of oil and gas. 2007 and 2008 can expect a growth of 5% and 8% respectively. Nigeria does not have manufactured goods. 25 % of total imports are manufactured goods. All machinery and transport equipment are imported and come to 16% of the imports. Chemical are also imported. US used to be the main trading partner of Nigeria to which it gave 8% of total imports while taking 58% of the exports. China is now the largest supplier of imports and supplying 11% (Country Report Nigeria, 2007, p. 3). Local Disputes in Nigeria The allocation of oil wealth is a bone of contention among the local ethnic people (Purefoy, 2005). The fight over the oil wealth has brought the differences of ethnicity and religion into the open and the streets and spill over into the oil facilities. Nigeria’s revenues touched 27 billion making it one of the top ten oil producers of the world. The southern regions immediately wanted a cut of 25 % of the revenue, far more than the 13% that was due to them. They wanted it to be further increased to 50% within 5 years. Frequent attempts have been made to resolve the disputes but failure is the outcome. The militia leader, Dokubo Asari, wanted the proceeds to be kept in the delta region itself (Purefoy, 2005). He also declared war on the oil facilities and the Government. This leader had a profound effect on world energy traders who pushed prices above $50 per barrel. In 2006, the oil prices reached $66 per barrel due to unrest in the Niger delta (Hagenbaugh, 2006). Analysts have predicted higher prices further on. The damage to the oil facilities has reduced oil output greatly. Estimates to repair the oil facilities come to $600 million. The US provided military assistance to combat the threats of terrorism, drug trafficking and petroleum theft. Corruption is so rampant that 80% of the revenue goes to 1% of the population (Purefoy, 2005). Trade Unionism Nigeria has imprisoned many trade unionists, human rights activists and political opponents of the military regime. Ken Saro-Wiwa was an author and playwright who was a symbol of resistance to the military regime. He was active in the struggle of his tribe, the Ogoni. of the Niger Delta (Damu and Bacon, 2001, p. 51). He helped to organize the MOSOP (Movement for the Survival of the Ogoni People). Foreign oil companies like the Royal Dutch Shell company has been extracting billions of barrels of oil. The others are the Italian AGIP, the French Elf-Aquitane and the US Giants Chevron and Mobil (Damu and Bacon, 2001, p.52). This hardly did anything for the Ogoni people. Their communities did not have pipe-borne water, electricity, schools, hospitals or roads. Oil spills have occurred whereby 2 millions of barrels had been emptied onto their agricultural land. The MOSOP demanded that Shell clean the area where pollution has occurred and use part of the revenue to uplift the Ogoni people. Saro-Wiwa was recognized for his endeavours and nominated for the Nobel Peace prize. He obtained the Golden Environmental Prize (Damu and Bacon, 2001, p.51). Shell blamed the loss of many barrels of oil on the Ogoni. Politicians who differed in opinion with Saro-Wiwa were killed by the rebels. The Government executed Saro-Wiwa. The Shell was blamed for this execution. Other leaders have also taken up the issues of disputes. The Economic Policies Nigeria’s economic policies have shown a great change of improvement. Technically knowledgeable and efficient people have been posted as officials (Country report Nigeria, 2007, p. 4). The NEEDS program has incorporated the economic policies since 2004. The International Monetary Fund has supported Nigeria through its Policy Support Instrument. Special attention is being given to “generating growth, raising per capita income, reducing external debt, improving government finances, reducing economic volatility, improving the business climate and securing property”. Nigeria has not met the targets given them but their performance is still considered as satisfactory. The President Yar’Adua has promoted a continuation of the policies followed in NEEDS. He is also bent upon improving the nation’s supply of electricity. Corruption is to be wiped out (Country Report Nigeria, 2007, p. 4). A surplus budget was evident twice in the past 25 years; in 1995 and 1996. Deficit has also shown to be mild. The financial situation has been good due to the high oil prices. The picture in 2006 is encouraging. The budget deficit is just 1.3% of the GDP. It was expected o reduce further to 1% in 2007 and 2008. A wise decision to use the unexpected income to pay off government debt was taken. The debt of 97 % in 2000 came down to just 16% in 2006. Development measures are being taken earnestly. With the oil exports providing 90% of the revenue, the government has become increasingly dependent on the “volatile international oil price and domestic oil production” (Country Report Nigeria, 2007, p. 4). This dependence on the oil revenue has a high risk in the long run. January 2009 shows the barrel price to be just $35. The Central Bank of Nigeria began a new monetary targeting policy which aimed at 8% target from December 2006. This helped to control inflation. A wide range of reforms are also being implemented. The currency is to be re-dominated. An inflation target is being used to be the nominal anchor for the monetary policy. Full current account convertibility is being brought about. The Nigerian exchange rate system is being coordinated. The currency naira has increased its exchange value by 8% in 2006 and traded at 124NGN/USD in October 2007. If oil prices remain high, this rate would be consistent and increase. Macroeconomic stability has been ensured with the good exchange rate and the monetary policy reforms (Country Report Nigeria, 2007, p. 4). Inflation was expected to fall to 7% in 2007 and then increase to 8% in 2008-2009. The President has taken initiatives to reform the Nigerian National Petroleum Corporation (NNPC). Five establishments are going to replace the NNPC. Corruption and lack of transparency are the two negative features of the NNPC which led to its rank incompetence. The oil industry and power sector are both still under government control. Concessioning has shifted the responsibility of government for the ports and telecom utilities (Country Report Nigeria, 2007, p. 4). Accounts The high international prices for oil helped Nigeria have a strong trade balance. A surplus of 26% in GDP was recorded. Imports had been increased. Oil exports had been reduced but sold at a higher price. All these contributed to the lesser GDP surplus of 26% in comparison to the 30% surplus of 2005. A surplus on the current transfers balance, marginally countered the deficits on the services and income balance. However the large and comfortable trade balance surplus boosted the current account leading to a surplus of 12.7 % of GDP in 2006. This figure was 9.9 % more than last year’s (Country Report Nigeria, 2007, p. 5). The FX reserves which generated the lower interest payments and higher interest receipts helped improve the income balance. The current account balance is expected to improve further in the coming years under the hope that oil output and exports would increase. The Niger Delta would then hopefully have lesser unrest. However the exact opposite could occur if the oil prices go lower. The 2008 peak is expected to fall as the current account balance would drop. Imports are expected to increase depending on the investments made on the oil and gas sectors. However in spite of the impressive current account balance, the current account subrating is bad plus due to the high dependence on oil exports and the poorly flexible import structure (Country Report Nigeria, 2007, p. 5). Foreign debt 2006 showed a significant improvement in debt position after steps were taken for debt cancellations and buybacks. Nigeria has been able to bring down the debt level of 65% in 2002 to 5.6% of GDP by the end of 2006. The large revenue inflow from oil exports helped to pay off debts (Country Report Nigeria, 2007, p. 5). At the same time many debt cancellations were given the government. The Paris Club was paid back a debt of $6.4 billion in arrears and allowed a debt cancellation of 33% of its debt. Another debt cancellation of 34% was permitted and Nigeria paid the balance of 6 billion dollars. Similar debt cancellations were allowed by the London Club. The Public Sector is responsible for the remaining external debt. This is expected to rise in the coming years as the government is implementing an ambitious infrastructure spending programme. It has a bilateral lending programme with China which is expected to improve financing. The rise in external debt would not affect Nigeria in the near future, short-term or medium-term (Country Report Nigeria, 2007, p. 5). Nigeria’s Liquidity Foreign exchange reserves have increased speedily due to the oil export inflows. Rescheduling and paying off of foreign debts also have led to a stronger and credible foreign debt position. The liquidity ratio which was at the poor position of 102 % in 2002 improved to 183 % in 2006 (Country Report Nigeria, 2007, p. 6). The improvement in the liquidity position is definitely due to the high international oil prices and the higher revenue from the oil exports. The success must be attributed to the Finance Minister who has shrewdly negotiated the rescheduling of the debts and the external factors. Finance experts still consider the liquidity position of Nigeria as vulnerable to fluctuations in the international price of crude oil. So the liquidity subrating is set at a weak position in spite of the good 2006 figures ((Country Report Nigeria, 2007, p. 6). Global oil prices Profound fluctuations have been noticed in the price of oil since the 1970s (Olomola, 2006, p. 28). Oil prices reduced output and caused a rise in inflation in the 1970s and early 1980s. From the mid to late 1980s, falling oil prices boosted output and lowered inflation in the US. The supply and demand channels are the mechanisms through which oil prices influence the economy. Crude oil is the basic input. A rise in the price of crude oil causes a rise in production costs which provoke a firm to reduce output. Consumption and investment are thereby also affected. Consumption has an inverse relationship with oil prices as it is related to disposable income. Oil prices affect the spending power of a customer. If the oil price shock induces producers to deviate the capital for low energy, investments are also affected (Olomola, 2006, p. 29). Some researchers are of the opinion that it is not the oil price shocks that cause fluctuations in the economy. They believe that the monetary response policy is what causes them. The 1974 economic recession of 1974 in the US could have occurred because the Federal Reserve altered its monetary policy into a tightening procedure leading to an inflation. Most studies concentrated on the oil importing countries. Few studies have focused on oil exporters like Nigeria (Olomola, 2006, p. 29). An oil price shock reduces GDP and then increases the price level (Gordon, 1984). According to the money supply equation, the oil price and the real exchange rate affect the balance-of-payments effects on the reserves. Domestic output and prices do not have any effect in a quarter. In the aggregate demand equation, domestic money shocks affect the output and here the relative price of oil and the real exchange rate influence the net exports. The oil price shocks, the real exchange rate, money supply and domestic output affect the domestic prices. The study by Olomola found that oil price shocks did not have any effect on the output and inflation rate in Nigeria. However the oil prices do affect the real exchange rates. These real exchange rates and the money supply affect the fluctuations in the economic activity (Olomola, 2006, p. 33). The Stock Exchange and Oil prices. The rising price of oil tends to bring the stock values lower. The price goes higher due to the instability in Nigeria. Fears of disruption of oil production further push the prices higher (Shell, 2004). Wall Street is believed to be “suffering from high anxiety about economic fall-out from the long term impact of high oil prices” (Shell, 2004). There are other reasons too for the investors at Wall Street to get worried. The economic problems caused by hurricanes and the Iraq war violences are added issues. The Dow Jones Index came down to below 10000 recently Conclusion The oil-rich country of Nigeria has a very poor per capita income and its people are suffering for want of a good life. Though it has billions of barrels of oil waiting to be extracted, it has no resources to do this itself. The government is inefficient and unable to use the oil resource itself for want of expertise and machinery to refine it. International companies are exploiting this situation for their own advantage. In spite of providing so much oil, it has not been able to acquire the technology to process the oil for its own purposes and for sale. This would have changed the economy to a progressive one. Its people would not have been below the poverty line as is prevalent. The education and health care activities would have improved greatly. The historical and geographical background may be part of the reason for the poor economy. . Bouyant oil revenues have brought great profits to Nigeria especially because it is situated away from the Middle East countries which are oil producers too. The US has a stable oil source in Nigeria. A huge improvement has been noticed in the trade balance and oil revenues in Nigeria. Business had better be on short term levels as the economical situation could change any time for the worse. The new President is efficient enough to continue on the good services of the previous one. Though the economic policies are improving, Nigeria is vulnerable to high tension situations of civil unrest, low level of development and high level of corruption and the fluctuating oil prices (Country Report Nigeria, 2007, p. 6). Nigeria can rest on its oil exports for a short term period or even medium term. However in the long run, it needs to look away from oil for revenues just to be on the safe side. References. Country Profile Nigeria. (2007). Economic Research Department Country Risk Research December 2007 Rabobank. Damu, J. and Bacon, D. (2001). “Oil rules Nigeria.” The Black Scholar, Vol 26, Issue No. 1, Gordon, Robert J. 1984. “Supply Shocks and Monetary Policy Revisited.” American Economic Review. May, 74:2. pp.38-43 Hagenbaugh, B. (2006). “Oil prices top $66 a barrel on unrest”, USA Today, 29/3/06 Academic Source Premier Kosinowski, M. (2002), “Oil exploitation techniques”. in Fossil Energy, Springer Verlag, 2006 Nigeria, Country Profiles, Pocket World in Figures 2007 edition. The Economist, Profile Books Nigeria. Retrieved on 20/1/09 . http://www.oxfordbusinessgroup.com/country.asp?country=70#eco, Oxford Business group Olomola, P.A. and Adejumo, A.V. (2006). “Oil Price Shock and Macroeconomic Activities in Nigeria”. International Research Journal of Finance and Economics, Issue 3, 2006. Purefoy, C.A. (2005). “Oil inflames Nigeria's ethnic tensions”. Christian Science Monitor, Vol 97, Issue 169, Pg. 7, Academic Source Premier Shell, A. (2004). “Dow dives below 10,000 as oil prices rise”. USA Today, 28/9/04 Academic Source Premier. Read More