Economist and Energy expert, Kelvin Emmanuel has raised concerns over the escalating crisis in Rivers State, warning that militant threats to oil infrastructure could destabilise Nigeria’s economy and disrupt foreign exchange inflows.
He said that the potential return of militancy is a major threat to oil production, with the possibility of operators pulling out if security deteriorates.
“There are over 2,600 shut-in wells in Nigeria, capable of adding 900,000 barrels of crude to daily output. If militancy resumes, operators will flee.
Before 2010, foreign oil workers had to take extensive life insurance due to security risks. We don’t want to go back to those dark days,” he warned.
“There has been an inflow of investors coming into Nigeria since the last quarter of 2024, and CBN has seen a surge of flows. But they know that the Niger Delta contributes 80% of FX to Nigeria, and there are $3.2 billion in obligations that CBN has to meet this year, including $400 million to the IMF and $1.2 billion in Eurobond yields,” Emmanuel explained.
Speaking in an interview on ARISE NEWS on Sunday, Emmanuel highlighted the potential impact of the state of emergency declared by President Bola Ahmed Tinubu, particularly on investor confidence and oil production.
“Political risk is a major risk that investors consider when they want to locate an investment,” Emmanuel said.
“Since that decision was made, there’s been chatter from foreign portfolio investors who are concerned about the contagion risk that the situation in Rivers State might have.”
The state of emergency was declared following attacks on critical oil pipelines, including the Trans-Niger Pipeline (TNP), which was recently taken over by Renaissance Group. The pipeline, capable of transporting 450,000 barrels of crude oil daily to Bonny River Terminal, accounts for 32% of Nigeria’s daily output.
Emmanuel warned that its destruction exposes vulnerabilities in the president’s plan to raise oil production to 2 million barrels per day.
“The TNP pipeline was blown up,” he stated. “This comes at a critical time when the government is doing all it can to revive oil and gas production. We are at 1.47 million barrels per day, aiming for 2 million in 2025 to fund budget assumptions at a $75 strike price. But oil will likely stay below $70 for most of this year. Meanwhile, we have a deficit of around 18 trillion Naira. It just doesn’t make sense to me.”
The federal government has appointed a sole administrator for Rivers State and withheld its federal allocation—a move Emmanuel criticised as potentially worsening agitation and political instability.
“In Rivers State, was there an attempt to call everyone together and say, ‘This is what is at stake’?” he asked. “The economy is struggling, the budget deficit is large, and the assumptions for the 2025 budget are already off because we don’t even have the money to meet them. If he has to call them two, three times, that is still a better option than appointing a sole administrator and withholding Rivers State’s allocation. It only fuels agitation and tension.”
Despite efforts by the president to engage key stakeholders in Abuja, Emmanuel argued that more political dialogue should have been pursued before resorting to emergency measures.
“The president is the leader. The buck stops at his table. There are no excuses. If a political solution wasn’t working, he should have tried again. Declaring a state of emergency, appointing a sole administrator, and withholding Rivers State’s allocation does not help ease tensions,” he stated.
“Beyond the political turmoil, the impact on foreign investment in the energy sector is a growing concern. Investors are closely watching the situation, wary of how it might affect production numbers, tax revenues, and government royalties.
“The political situation in Rivers State was not anticipated, and now militants are threatening to bomb oil installations. This situation needs to be managed carefully by the National Security Advisor and the presidency because it could undo a lot of progress made so far.”
“If this situation spreads into Bayelsa and companies handling pipeline security contracts fail to contain it, will the president declare a state of emergency there as well? Prevention is better than cure. The government should resolve this politically before it escalates,” he cautioned.
He noted that international oil companies like Shell had foreseen the security risks and shifted their focus away from land and swamp production.
“Just days after Shell officially handed over SPDC to Renaissance, the Trans-Niger Pipeline was blown up. The government cannot afford such disruptions,” he added.
Drawing comparisons to Guyana, Emmanuel lamented Nigeria’s slow progress in oil production.
“Guyana achieved first oil only five years ago and now produces 660,000 barrels per day. Nigeria has been producing for 57 years and is struggling at 1.47 million barrels per day. We should be at 10 million barrels per day, competing with Russia and Brazil, not Guyana,” he stated.
“By 2030, Guyana will hit 1.3 million barrels per day, while we may still struggle with 1.8 million due to issues like Niger Delta militancy, which was solved 16 years ago but is resurfacing.”
Beyond security challenges, Dangote Refinery’s recent decision to halt the sale of petrol in Naira has raised further questions about the state of Nigeria’s oil and gas sector.
Emmanuel pointed out the steady decline in Dangote’s local currency fuel sales, stating that the situation reflects larger issues in the country’s crude supply chain.
“Since the program started on October 1, 2024, Dangote Refinery was averaging 110,000–120,000 barrels per day in local currency sales. In January, it dropped to 83,000 barrels per day, in February to 61,000, and by mid-March, it stopped entirely,” he revealed.
Criticising the NNPC’s inability to compete, Emmanuel questioned why the state-owned company struggles to refine oil, despite investing $2.4 billion in turnaround maintenance.
“People say Dangote is a monopoly, but NNPC claims it has refineries working after borrowing $2.4 billion for turnaround maintenance. If NNPC is truly refining, why is it not competing? In fact, NNPC owns shares in Dangote,” he pointed out.
He also expressed frustration over Nigeria’s largest refinery importing crude, despite the country being a major OPEC producer.
“Nigeria, a major OPEC member, should not have its largest refinery importing crude from outside the country. In February, Dangote imported over 6 million barrels, and in March, nearly 10 million barrels. He is selling below PLATTS pricing, yet struggles to get crude feedstock domestically. This highlights leadership failure in the oil and gas sector,” he said.
With Nigeria’s economy heavily reliant on oil revenues, Emmanuel warned that the government must act swiftly to address the political crisis, security threats, and energy sector inefficiencies.
“This situation needs to be managed carefully by the National Security Advisor and the presidency because it could undo a lot of progress made so far.”
If left unresolved, he cautioned, Nigeria risks deeper economic instability, loss of investor confidence, and prolonged security challenges in its vital energy sector.
