Saudi Arabia Invests $100b In India, threatens Nigeria’s Oil Export

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Crude Oil
Crude Oil

Saudi Arabia has concluded plans to invest $100 billion in India, Nigeria’s major oil importer, thus threatening future importation from the country.

The moves by Saudi Arabia, the 14th largest country in the world, covering around two million square kilometres, making it the second largest OPEC member country with a population of over 32 million, is said to be aimed at capturing the entire Asian market for its oil.

The opening up of new markets is expected to enable Saudi Arabia that also possesses around 18 per cent of the world’s proven petroleum reserves generate adequate foreign exchange for its development.

In its recent report, the Organisation of petroleum Exporting Countries, OPEC stated: “The oil and gas sector accounts for about 50 per cent of gross domestic product, and about 70 per cent of export earnings. Apart from petroleum, the Kingdom’s other natural resources include natural gas, iron ore, gold, and copper.”

Meanwhile, Crown Prince of Saudi Arabia, Mohammed bin Salman provided details about the planned investment, stating: “The investment covers projects in areas such as energy, refining, petrochemicals, infrastructure, agriculture and manufacturing. Saudi expects the opportunities targeted in the various areas to exceed $100 billion dollars in the coming two years.

“The refining project involves Indian companies including Reliance Industries, operator of the world’s biggest refining complex.”

However, Nigeria recorded crude oil export of N11.5 trillion in nine months, from January to September 2018, rising by 48.01 per cent from N7.77 trillion recorded in similar period in 2017.

The value of crude oil export in the nine-month period is over N2 trillion more than the N9.12 trillion budget for 2018 and about N3 trillion more than the 2019 budget proposal.

According to data obtained from the National Bureau of Statistics’, NBS, Foreign Trade Statistics for the Third Quarter of 2018, crude oil export in the nine-month period accounted for 81.8 per cent of total exports recorded in the Nigerian economy in 2018.

Specifically, the report stated that crude oil export in the first quarter of 2018, appreciated by 51.05 per cent compared to N2.37 trillion recorded in the first quarter of 2017; while in the second quarter of 2018, crude oil export stood at N3.77 trillion, appreciating by 55.14 per cent from N2.43 trillion recorded in the same period of 2017.

Third quarter 2018 crude oil export, according to the report, appreciated by 39.17 per cent from N2.97 trillion recorded in third quarter 2017 to N4.15 trillion.

“Crude oil exports in third quarter 2018 was 10.03 per cent more than the value recorded in second quarter 2018 and 39.5 per cent higher than the value recorded in third quarter 2017. Other oil products export in third quarter 2018 was 5.3 per cent more in value than second quarter 2018 and 12.68 per cent higher than third quarter 2017,” the NBS report noted.

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 N4.147 trillion, N469.87 billion respectively, other petroleum gases export stood at N27.85 billion.