Last month, Saudi Arabia declared its intentions to invest USD 100 Bn in India infrastructure services. The promise which was made during a visit to New Delhi by Crown Prince Mohammed Bin Salman could profoundly affect Nigeria since India is the West African nation’s major oil importer.
While Nigeria faces a developing uncertainty in the price of crude oil, the black nation may be losing its market in Asia, as the to-be investment threatens future importation of the country’s crude by India. The move, which many accuse of being deliberately canopied by friendly politics between India and Saudi Arabia, is believed to be an aim by the investing country to capture the entire Asian market for its oil.
Saudi Arabia, the fourteenth largest country in the world which covers around 2 million square kilometers, is the second largest member of the Organisation of Petroleum Exporting Countries (OPEC). These advantages coupled with its 32 million population figure, are enabling the country to attempt a full sweep on the Asian oil sector.
If Saudi Arabians are able to open new markets, they will also possess some 19 percent of the world’s petroleum reserves and generate sufficient foreign exchange for its development. In what was a briefing about the massive investment, Crown Prince Mohammed bin Salman said: “The USD 100 Bn covers projects in areas such as energy, refining, petrochemicals, infrastructure, agriculture, and manufacturing”. According to him, Saudi expects the opportunities targeted in the various areas to even “exceed” the designed amount in the coming two years.
Nigeria, who is yet reeling from the effects of what was a controversial presidential election, recorded crude oil export of NGN 11.5 Tn (USD 31,829,504,500) in nine months, from January to September 2018. It was a 48.01 percent rise from NGN 7.77 (USD 21,311,929,100) Tn which was recorded in a siamese period in 2017. Hence, crude oil export value in the nine-month stretch is in excess of NGN 2 Tn (USD 5,535,566,000), than the NGN 9.12 Tn (USD 25,242,180,960) the government budgeted for 2018. The result also surpasses the NGN 3 Tn indicated in the 2019 budget proposal.
According to a statement from the National Bureau of Statistics (NBS), foreign trade statistics for Q3 2018 saw crude oil export during the said nine months account for 81.8 percent of the total exports recorded in the West African nation’s economy in 2018. The information which was part of a report stated that crude oil export in Q4 2018 appreciated by 51.05 percent compared to the NGN 2.3 Tn (USD 6,365,900,900) recorded in Q1 2017. In Q2 2018, the same export was valued at NGN 3.77 Tn (USD 10,434,541,910), showing a 55.14 percent appreciation from NGN 2.43 Tn (USD 6,725,712,690) recorded in a similar period last two years.
Q3 2018 brought on a 39.17 percent appreciation from NGN 2.97 Tn (USD 8,220,315,510) in Q3 2017 to NGN 4.15 Tn (USD 11,486,299,450). In its breakdown of exports in the third quarter of 2018, the report stated that crude oil and Liquefied Natural Gas, LNG, export stood at NGN 4.47 Tn, (USD 12,371,990,010) NGN 469.87 (USD 1,300,498,198) Bn respectively, other petroleum gases export stood at N27.85 Bn (USD 77,082,756). Q3 2018, crude oil export, according to the report, appreciated by 39.17 percent from NGN 2.97 Tn (USD 8,220,315,510) recorded in third quarter 2017 to NGN 4.15 Tn (USD 11,486,299,450).
The numbers are sure impressive compared to some lot, and Nigeria has been put as one of the fastest growing economies in Africa. The massive investment in India by Saudi Arabia could be a heavy blow in the face of the African nation’s oil exportation to India, who is not just a regular customer, but a very generous one at that. While Saudi has invested more than USD 44 Bn already in India since 2016, the recent bombshell may very well put the most populous black nation out of the Indian oil business. But, finally, it is still anyone’s guess.
Featured Image: Anadolu Agency