The Nigerian economy is heavily dependent on the oil sector which, according to the World Bank, accounts for over 95 percent of export earnings and about 85 percent of government revenues. The oil industry is primarily located in the Niger Delta where it has been a source of conflict. The industry has been blamed for pollution that has damaged air, soil and water leading to losses in arable land and decreasing fish stocks. Local groups seeking a share of the oil wealth often attack the oil infrastructure and staff, forcing companies to declare force majeure on oil shipments. At the same time, oil theft, commonly referred to as “bunkering” leads to pipeline damage that is often severe, causing loss of production, pollution, and forcing companies to shut-in production.

Source: CIA

In addition to oil, Nigeria holds the largest natural gas reserves in Africa but has limited infrastructure in place to develop the sector. Natural gas that is associated with oil production is mostly flared but the development of regional pipelines, the expansion of liquefied natural gas (LNG) infrastructure and policies to ban gas flaring are expected to accelerate growth in the sector, both for export and domestic use in electricity generation.

In 2006, total energy consumption for Nigeria was approximately one quadrillion Btu. The country’s energy consumption mix was dominated by oil (53 percent), followed by natural gas (39 percent) and hydroelectricity (7 percent). Coal, nuclear and other renewables are currently not part of Nigeria’s energy consumption mix, with the exception of biomass often used to meet rural heating and cooking needs.