The Export-Import Bank (Ex-Im Bank) of the United States on Thursday said that it had signed a deal for a $13.1 million loan guarantee to back the sale by Halliburton Energy Services, of Houston, TX, of state- of-the-art LWD technology, services, and equipment to Nigerian company Drillog Petro-Dynamics Ltd., of Port Harcourt.
The company will use the technology to glean information about the drilling process, well geometry, and rock and fluid properties for major international oil firms with operations in Nigeria.
HSBC Bank PLC, London, is the transaction's guaranteed lender. Nigeria's Diamond Bank is borrowing the money.
Nigeria is the world's eight-largest producer and exporter of oil and the largest African producer. Nigeria hosts many of the world's largest oil and gas corporations such as Royal Dutch Shell and British Petroleum (BP).
Nigeria depends on oil for over 90% of its export revenues.
However, it is a very troubled country. Nigerian gunmen have disrupted and damaged oil supply lines and kidnapped oil company officials and workers, out of resentment at not receiving what they believe should be their fair share of the oil wealth that Nigeria has been enjoying.
Beginning in the early 1990s, the southern part of the nation was hit by seizures of oil installations and abductions as the militant youths insisted that the people deserved more of the oil revenues.
By the end of that decade, Nigerian oil production was sometimes diminished by over 30% off of capacity because of constant disruptions by the militants. The multinational oil producers began to feel the risks to their operations more keenly, and prices on the world market sometimes fluctuated dramatically because of the militant actions in the Niger Delta in spite of the fact that onshore oil production costs in Nigeria are the lowest in the world.
In recent times, the continued aggression of the militants, which has included burning oil wells, has often led to temporary but sharp price increases for crude oil, which has driven up gas prices in the United States and elsewhere in the developed world.
The hope seems to be that modernizing Nigerian oil producing infrastructure can increase production, making the supply line less vulnerable to the militants' activities and maybe increase revenues enough to start having a "trickle down" effect and give the people at least some of what they want.
"This transaction supports U.S. jobs, and also equips Drillog Petro-Dynamics to be the first Nigerian local service company to offer these advanced drilling services to oil majors. We believe African markets offer great potential for American exporters, and our financing support can help make more transactions like this a reality," said Ex-Im Bank Chairman and President James H. Lambright.
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