Bilateral trade: Nigeria rebuffed by Caribbeans over oil export
LAGOS – The move by Nigeria to penetrate the Caribbean regional oil export market through bilateral trade relations may have met with a brick wall as some members of the regional economic bloc who though desire economic relation with Nigeria have insisted that crude oil be excluded from the list of the bilateral trade between them and Nigeria.
This is coming on the heels of the United States of America closing its market to crude oil export volumes from Nigeria. Nigeria is said to be losing the United States as its biggest oil customer amid surging output and the development of Shale oil in North America, prompting Nigeria, Africa’s top producer to be searching for alternative oil markets.
Traders are predicting that United States purchases of Nigerian crude this year is expected to fall to a six-year low by second quarter this year, and this will push Nigeria to seventh position from among suppliers to the United States.
The United States is awash with light crude, leaving Nigerian crude faced with the possibility of being priced at a discount to secure new markets.
PetroCaribe, the regional oil cooperative controlled by Venezuela to supply cheap crude oil to neighbouring countries seems to be standing as a barrier to the trade relations with Nigeria.
PetroCaribe supplies 120,000 – 140,000 barrels of crude per day at favourable financing terms to 18 Caribbean nations, including 14 out of 16 from the CARIFORUM (Caribbean Group of African, Caribbean and Pacific States).
Sanjhevi Kempadoo, the Special Adviser to the Prime Minister, Dr. Densil Douglas of St Kitts and Nevis, one of the Caribbean countries, said in an interview that they are not seeking economic relations with Nigeria in the area of oil and gas but in banking, hospitality, real estate and other service industry. According to her St. Kitts and Nevis gets all her Crude oil and petroleum products requirement from Venezuela her next door neighbouring country, rich in oil as Nigeria.
PetroCaribe is said to be providing the Caribbean nations with special incentives and low interest loans to import petroleum products from Venezuela though they pay part of the oil up front, and then pay off the rest within 25-years at one percent interest rate.
Although the percentages do fluctuate, most of the countries in this PetroCaribe generally pay for only 40-50 percent of the crude they get upfront.
‘No wonder figures like Dominican Republic Energy Minister Temístocles Montas and Haitian Prime Minister Laurent Lamothe are fearing that any change of government could foster a new Venezuelan regime that is less keen on PetroCaribe’ oil traders said.
St. Kitts and Nevis is said to be seeking a bilateral trade agreement with Nigeria but insists that oil be excluded. According to the Prime Minister who was in Nigeria recently his country is inviting those Nigerian businessmen who are into Banking, Real Estate and commerce to come and take advantage of the rapid economic transformation that is going on in St. Kitts and Nevis.
According to him, St Kitts and Nevis will be awarding Nigerian businessmen with citizenship and tax holiday for anyone who will invest up to the tune of $400,000 annually.
‘Apart from the tax incentives our government will give the investor what we term citizenship by investment,’ he had said.