Monday, 6 August 2012

Nigeria, Jamaica to boost bilateral ties with Oil & Gas trade

One of the outcomes of the two-day visit of President Goodluck Jonathan’s state visit to Jamaica, which coincided with the celebration of the country’s Golden Jubilee is the resolve for Nigeria and Jamaica to re-visit their interests in the multi-million dollars oil and gas trade with a view to boosting bilateral ties in the trade of the commodities which was first suspended in 1993 by the military regime of the late General Sani Abacha.
Both Jonathan and Jamaica’s Prime Minister, Simpson Miller  were worried about the suspension of the two countries technical cooperation in oil and agreed on a bilateral talks to start exploring possibilities of cooperation in this area. According to a communiquĂ© issued in Jamaica at the end of the talks, the two leaders “expressed concern over the status of Jamaica-Nigeria technical cooperation in oil, as the Jamaica-Nigeria oil facility had been suspended.
 In May 2012, at the Global African Diaspora Summit in Johannesburg, the two leaders had co-chaired similar high-powered bilateral meetings on matters of mutual interest between the two countries including energy, trade, air services, sports, cultural and technical cooperation. Security concerns and the desire by Jamaica to get a steady supply of crude oil from a favourable partner were said to have motivated the first oil deal between the two countries in 1978 when President Olusegun Obasanjo was the military leader of Nigeria. The then prime minister, Michael Manley of Jamaica, who was seeking to partner friendly countries signed the deal which fetched the Petroleum Corporation of Jamaica (PCJ), via the instrumentality of Vitol SA and Trafigura Limited, a net income of some US$4.6 million before it was cancelled in 1993.
 It was decided by the Abacha government that Jamaica and other benefactors would have to re-negotiate new agreements with Nigeria. This prompted the PCJ to try the renegotiation of the deal for seven years without success, until Obasanjo returned to power in 1999.
 A new deal was concluded a year later and PCJ immediately sought a new trader, settling with Trafigura for a US7.5 cents per barrel commission. This was later increased to US12 cents, which profit was used by PCJ to finance research on oil exploration, renewable energy, conservation and the possibilities of LNG. However, the contract with the Dutch firm, Trafigura, ended in controversy in 2007 over a $31 million payment made to the then ruling People’s National Party (PNP) of Jamaica.

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