An Oil Partner Fighting To Right Itself

By David Herbert  

David Goldwyn

State Department’s coordinator for international energy affairs

NJ: Some Nigerian lawmakers are upset about the country being subjected to increased air travel security. Is there a chance they could shut off the spigot to the U.S.?

Goldwyn: U.S. and foreign investment in Nigeria is largely dealt with on a commercial basis. Nigeria respects the contracts and the joint ventures it has with its operators. The production from those joint ventures and from the production-sharing contracts provide the income which allows Nigeria to provide for its people. I think the U.S. and Nigeria will manage the current issues very well. To the extent there are frictions, I don't think it will affect oil production.

NJ: In your dealings with Nigerian lawmakers in the fall, how much of a problem was the absence of President Yar'Adua?

Goldwyn: When I was in Nigeria and when I met with Nigerian officials here, they were quite clear about their instructions from the president on the direction of the petroleum industry reforms and electricity reforms.

NJ: In October, there was some hope for peace in the Niger Delta after a highly publicized cease-fire. That hasn't quite worked out. What are the prospects for peace there?

Goldwyn: The key to producing lasting peace in the delta is for the government of Nigeria to have a well-developed plan for job creation and wealth creation in the Niger Delta, combined with a security strategy to protect the citizens and to protect industry. So far, the government has been working on both, but more needs to be done on the development side in order to create a long-term sustainable solution.

NJ: But you've also said there are problems with a potential local content policy, which would force companies to buy materials domestically. How do you walk the line between not scaring off investors and stimulating your local economy?

Goldwyn: I think the Nigerian government has listened to numerous stakeholders -- companies operating in Nigeria, companies seeking to operate in Nigeria and the international financial institutions -- with respect to its proposed legislation. Nigerians want to promote local content, and they want to do it in a way that allows production to grow. I'm optimistic that the final version of the bill will respect or reflect a lot of those concerns, because when they were here, the Nigerians were open to listening to those concerns and heard a lot from stakeholders about ways to improve the bill.

NJ: It's been months since we last spoke. In another four months, what would you like to see happening on the ground?

Goldwyn: Obviously, Nigeria is going through multiple transitions right now in its legislative framework. And they're dealing with the president's frail health. My hope four months from now is that Nigeria will have produced energy sector reform that will provide it with the potential for new investment; electricity sector reform that will incentivize the use of its gas for electric power, and that it will have made progress on a development strategy for the Niger Delta that will provide more lasting peace and prosperity for the people of the Niger Delta.

NJ: A lot of very smart, committed people worry that Nigeria is a lost cause. When we spoke last time, you said Nigeria is too important to lose hope over. Are you more or less hopeful after traveling there and, of course, witnessing the developments of the last few months?

Goldwyn: [Smiles] Nigeria is too important to lose hope over.