Halliburton Gets Backing for Sale of Oil-Drilling Technology to Nigeria

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.