In a Dec. 2 statement, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) president, Comrade Igwe Achese, expressed concern over the drop in refinery output capacity to 16 percent despite the abundance of crude oil in the country. The union stressed that the federal government must ensure the maintenance of the nation’s refineries for security reasons and not be allowed to let them rot away or sold for scrap.

Out of Africa?

Even before crude prices began free-falling, several of the world’s largest oil companies, including Chevron, ExxonMobil and Royal Dutch Shell, announced they were cutting operations and postponing expansion plans.

“The oil companies that are reducing their exposure in Nigeria are doing so for a variety of different reasons, none of which are directly connected to OPEC,” Campbell told AFKInsider. “It has to do with security issues and the potential for unrest. But also, very often the oil companies will sell off their oil blocks when they have – in their view – derived maximum profit from them. So it’s very often a business calculation.”

Historically, large drops in oil prices have also resulted in energy industry mergers and acquisitions as larger multinational firms snatch up smaller companies – something bankers and investors love.

Finding New Markets

While some new foreign investment to Nigeria has been held back due to uncertainty of passage of the Petroleum Industry Bill, Center for Strategic and International Studies’ Cooke says a number of local companies have taken advantage of that.

“One of the interesting things that its done is by holding back and deterring, to some extent, international companies from coming in, there have been a rash of indigenous Nigerian companies that have moved into that space,” Cooke told AFKInsider.

“They don’t have the technical capacities that the big, deepwater operators have, but one of the consequences of the hold up has been that it has empowered this class of indigenous companies,” Cooke told AFKInsider.

In the meantime, it is clear that with the decrease in U.S. oil imports from the region, countries like Nigeria and Angola will be actively searching for new markets.

But it won’t be easy.

“You don’t just shift overnight your market from the U.S. to someplace else,” Council on Foreign Relations’ Campbell told AFKInsider.

“The oil that Nigeria produces – Bonny Light Crude – is light oil. The oil refineries in China are designed to process heavy oil – the kind of oil that comes from the Middle East. My guess would be that a much greater percentage of Nigerian oil is now being sold on the spot market in Rotterdam than use to be the case,” Campbell told AFKInsider.

“Ultimately in the global oil world, somebody’s going to buy Nigeria’s oil, but it’s going to be hard for Nigeria. It requires a transition as they find and arrange for new buyers,” Cooke told AFKInsider.

Meanwhile, what the recently announced targeted sanctions against Venezuela means for restoring U.S. oil imports from Africa is still unknown.