Nigeria's determination to keep its oil prices high despite a current worldwide petroleum surplus forced the country to cut back its production sharply last month and may reduce its oil revenue by $1 billion this year.
Although Nigeria depends on oil sales for 85 percent of its national revenues, President Shehu Shagari said last week that the country remained committed to the high pricing policy of the Organization of Petroleum Exporting Countries regardless of market pressures.
Shagari, speaking at the opening of Nigeria's new $800 million Kaduna Refinery, also said that the Nigeria National Petroleum Corp., the government-run agency that markets the country's oil, would be reorganized to provide greater "profit motivation."
The world oil glut, which saw many users desert high-priced producers and buy instead on the less expensive spot market or simply postpone purchases, forced Nigeria to reduce its production from the normal 2.2 million barrels a day to 1.5 million.
This month, with the Iranian-Iraq war lowering world production, Nigeria has raised output to 1.9 million barrels a day and oil industry sources say that in November it expects to resume full production.
The September slump, nonetheless, cost Nigeria an estimated $450 million and one official said that the projected oil earnings for this year have been reduced from $23 billion to $22 billion.
Nigeria was especially hard hit by the world oil surplus because, like most Third World countries, it is short of highly skilled experts, needed here to operate its oil marketing operation.
This is clearly what Shagari intends to remedy. "We are still learning this business," an official of Nigeria's semiofficial Business Times weekly said. "We don't have the people [in the National Petroleum Corp.] we need to run it properly."
"If there had been no Iranian-Iraqi war," a knowledgeable oil industry source said, "Nigeria would have been stuck at 1.5 million barrels of oil a day for some time," a production slump that would have cost the country $15 million a day and had a considerable impact on the economy.
Nigeria exports all but 200,000 barrels a day of its producton, but it is expected to consume at least half of its daily production by the early 1990s, possibly cutting further into revenue from abroad.
The recent slump was the result of a surplus, before the Persian Gulf war began, of 1.5 million barrels a day in world production above the 50 million barrels a day consumption in industrialized countries. In August and September, light crude, low-sulfur oil of the kind that Nigeria sells at $37 a barrel, was selling on the spot market at $32, although it since has risen to about $37.
Nigeria stubbornly adhered to the OPEC-agreed price of $37 a barrel for its top-quality crude although, as one industry source said, "the first crudes not to be bought in such a situation are light crudes."
The United States, which buys about a million barrels of Nigeria's daily production, and the country's other Western clients continued to buy their contractural amounts during the glut. Diplomatic and oil industry sources said, however, that Eastern European countries and third party contract holders went to the spot market for the cheaper oil.
In his speech, Shagari said that the Nigeria National Petroleum Corp. will be decentralized because "its present structure is so unweildly as to render effective management virtually impossible." He added, "It is our intention to restructure the NNPC under the umbrella of a holding company operating as a modern business enterprise with profit motivation."
Shagari also seemed to indicate that Nigeria would soon change its marketing practices significantly to avoid a repetition of the country's production drops. "In the area of crude sales," he said, "we shall diversify our customers on both geographical and ideological bases."
Since the Perian Gulf war broke out, Nigeria's customers have begun to return.
"We're still not doing too badly," a Nigerian official added, referring to the new projected oil earnings figure of $22 billion for this year. "That is still three times what we earned two years ago."
In a related development, oil industry sources said that contrary to earlier reports that Nigeria was fining three oil companies here -- Shell, Gulf and Mobil -- $6 billion for revenue lost in a similar production drop between 1975 and 1978, the actual amount will be $64 million or less.
The flap over the fining of the three companies grew out of an investigation into reports since proven false that $5 billion was missing from the Nigerian marketing corporation's accounts. But the tribunal investigating the charges found that the country had lost millions of dollars in revenue because pricing had led to a drop in sales at different times between 1975 and 1978.
The tribunal recommended to Shagari that the three biggest oil companies operating here should hand over 80 million barrels of oil to the government because they continued to sell their total share of production while the government's sales dropped. The loss in sales, government officials say, should have been shared equitably between Nigeria and the oil companies.
The 10 oil companies operating here produce all of Nigeria's oil and have the right to purchase percentages of their production. The rest is marketed for Nigeria by the National Petroleum Corp.
With a government-set profit margin of 80 cents a barrel, this could mean a $64 million loss to the three companies in 1980 dollars.
"We're trying to negotiate that and they are not being difficult about it," said one industry source. The three companies could end up losing anywhere from "zero to $64 million," he said.
"There is movement toward a signed agreement," said a high-level industry source, "but whatever the outcome even paying the total $64 million is peanuts to the oil industry."