Oil Politics and Nigeria-United States Relations, 1999-2007

ABSTRACT Nigeria-United States relations can best be described as a tale of two giants representing the centre and the periphery. Since 1989, the United States has remained undisputed super power in a unipolar world. Nigeria on the other hand is a regional hegemon. Its petroleum and its substantial standing military force guarantee its prominence in International relations. The expanding large consumer market and petrodollars have made Nigeria-United States relations inevitable. Since the democratic governance in 1999, the United States government has not only invigorated its diplomatic relations with Nigeria, but has also been willing to increase its financial assistance to the country. Research report has revealed that Nigeria has become one of the fastest growing sources of oil and gas for American markets. In 2002 William Miner revealed that Nigeria was the fifth largest supplier of crude oil to the United States market and provided 70% of Africa’s total crude oil production. With the endless Middle East crisis, it is estimated that the United States could increase its imports of African oil from the present 15 to 25 percent of the total consumption and the NEW GULF – the gulf of Guinea offers new sources of oil supply. The central aim of this study was to critically evaluate how Nigeria can meet the United States oil demands within the context of OPEC Politics. More importantly, the study was designed to assess the impact of Nigeria-United States relations on foreign aid, foreign direct investment, international trade and socio-economic development. The study was guided by five research questions and five hypotheses. To analyse the issues raised, the study was anchored on the dependency theory. The theory x-rayed the structural inequality in international system and how the center states such as the United States exploits the periphery states such as Nigeria. Our research design was non-experimental. We made use of both primary and secondary sources of data. The primary sources include bilateral agreements and memorandum of understanding between the United States and Nigeria, official and international documents from government and agencies such as the United States embassy, the United States Department of State, the United States Senate reports on Africa, Congressional research briefs on Africa, Federal Office of Statistics, Nigerian National Petroleum Corporation and Nigerian Foreign Service among others. We also interviewed key stakeholders in Nigeria-United States relations. We relied heavily on secondary sources such as current textbooks, journals, seminar papers and conference papers. Research questions one, two and three were analysed using percentages and statistical tables. To ensure the reliability and validity of instruments, the technique of content analysis x was rigorously and systematically applied. After a detailed review of the extant literature and analysis of available data, the following findings were made; first, Nigeria currently sells 40% of its oil to the United States. Since, Nigeria’s oil is so vital to the American economy, American State Department declared in 2002 that – along with all other African oil imports – oil was to be considered a “strategic national interest”. That essentially means that the president could send in the U.S military to protect their access to it. The study further revealed that by 2020, the United States will need to import 17 million barrels of oil per day, 6 million more than it does presently from Nigeria. It was further revealed that global supply of oil is currently estimated at over 1,000 billion barrels, and nearly 75% of it is owned and controlled by OPEC members. The implication is that it may not be possible for the United States to satisfy its increasing appetite for Nigeria’s oil within the context of OPEC politics. The U.S may either lure Nigeria out of OPEC or disorganise the organisation to achieve its foreign policy goal. Finally, the study revealed that the United States is the largest foreign investor in Nigeria, with American private investments concentrated in the oil sector and some in communications. This explains the reason why the U.S government sponsored the African Growth and Opportunity Act initiated in the congress to boost United States trade and investment in Nigeria in particular and Africa in general.