In the wake of two dictators

The death of Nigerian dictator General Sani Abacha on June 8 brings to the country's oil industry an unexpected period of additional uncertainty. Abacha was 54 at the time of his death. As the only candidate in a "democratic" presidential poll slated for Aug. 1, and with his main opponents safely in jail, his future looked secure-for a dictator. The job of dictator tends to carry with it hazards such as poisoned coffee, knives in the back, hails of bullets, and the like, so I was surprised

June 15, 1998

3 min read

David Knott
London
[email protected]

The death of Nigerian dictator General Sani Abacha on June 8 brings to the country's oil industry an unexpected period of additional uncertainty.

Abacha was 54 at the time of his death. As the only candidate in a "democratic" presidential poll slated for Aug. 1, and with his main opponents safely in jail, his future looked secure-for a dictator.

The job of dictator tends to carry with it hazards such as poisoned coffee, knives in the back, hails of bullets, and the like, so I was surprised when press reports said Abacha died of a heart attack.

Mundane though Abacha's end was, the quandary in which he leaves his successor, and potentially Nigeria's foreign oil operators, is massive. Nigeria produces 2 million b/d of oil, is corrupt, and is $37 billion in debt.

Major-General Abdusalam Abubakar, currently chief of defense staff, has been identified as Abacha's successor. Among his earliest visitors are likely to be foreign oil company officials trying to gauge his plans.

Their chief concern is the government's underfunding of Nigerian National Petroleum Corp. (NNPC). Though NNPC holds interests of more than 50% in oil producing ventures, it has been contributing less than its share for some time (OGJ, May 12, 1997, p. 45).

Role model

In appearance and behavior, Abacha followed the style made famous by Uganda's President Idi Amin, in power during 1971-78.

Like Amin, Abacha was an imposing man with a taste for garish uniforms. He shared a tendency to deal brutally with political opponents and citizens from a different ethnic background than his own.

Coincidentally, as the oil industry works out how long it will take to repair the damage caused by Abacha's rule, the first-ever seismic survey in Uganda has just begun, 20 years after Amin fled into exile.

In late May, London-based Heritage Oil & Gas Ltd. began a 40-50 day program to acquire 160 line-km of 2D seismic data on Uganda's Block 3.

The block covers 4,630 sq km including part of the Ruwenzori foothills, the Semliki flats area north of Fort Portal, and one third of Lake Albert. It is part of the Albertine Graben trend, which connects to an area in Sudan where oil has been found. Uganda's only oil exploration well was drilled in the 1930s, when the country was governed by Britain.

Ugandan exploration

Michael Wood, finance director of Heritage, said that, from the early 1960s until recently, Uganda was "not an easy place to invest."

Since taking power in 1986, President Yoweri Museveni has revived Uganda's economy. Before then, several oil companies secured exploration licenses but pulled out without fulfilling work obligations.

Heritage's obligation is limited to seismic. Wood said the company will review its data by yearend and hopes this will lead swiftly to drilling: "It's arelatively low-cost program, but intriguing."

This week, Heritage hopes to confirm a farmout of 10% of its license to Petrel Resources plc, Dublin, and is at "an advanced stage of negotiations" to farm out more of its remaining 90% within the next few weeks.

"It has been known for many years," said Wood, "that there are oil seeps along Uganda's rift valley area. Technical work by the British Geographical Society in the 1940s and '50s suggests there are two or three sources."