1. Nigeria 1.1.

In General In general energy is an important factor in the EU-Nigeria relationship, as the EU is a major consumer of Nigerian oil and gas exports (around 20 % of the crude oil and 80 % of the gas) and a major current and potential investor in the industry. Moreover, Nigeria has a key role to play in the finalization and implementation of the TransSahara Gas Pipeline, which should offer an alternative supply route to the EU. Energy was not part of the 9th EDF1 programming and only came on the agenda during the political dialogue in 2008. Nevertheless, the EC has been paying attention to the situation in the Niger Delta with the implementation of three important micro-projects programmes running from 2003 to 2011. Concerning cooperation under the 10th EDF, the conclusion of the Ljubljana meeting was to agree that the EU and Nigeria should focus on three priority areas, namely (i) peace and security, (ii) governance and human rights, (iii) trade and regional integration, and that key development issues (including environmental sustainability and climate change, energy security and culture) should also feature high on the cooperation agenda. 1.2. Expectations Nigerias major expectations from the political dialogue relate to its need (i) to increase electric power generation and distribution, (ii) to fully implement the Nigeria Gas Master Plan, with its focus on domestic gas distribution, (iii) to facilitate the transfer of technology and (iv) to achieve the peaceful settlement of the conflict in the Niger Delta, which currently undermines stability in the region and reduces Nigerias production capacity. 1.3. EU 2020 The EC has a policy based on securing supplies, reducing production costs and increasing the use of renewable energies (EU 2020). In this context, Agenda 2020 targets 20% of all Nigerian energy consumption to come from renewable sources by 2020 and encouraging transparency in the energy industry. 2. Nigeria Energy Profile (Technical Description) 2.1. Nigeria Energy Sector (Fossil fuels) The economy of Nigeria is heavily dependent on oil and gas, which accounts for over a third of gross domestic product (GDP), 84 % of Federal Government revenues, and 98 % of exports. The oil sector is dominated by six major international oil companies operating under joint venture arrangements with the Federal government. At full capacity, Nigeria can produce some 2.5 million barrels per day but recent tension in the oil producing regions of the Niger Delta has reduced actual output by around one
1

The European Development Fund (EDF) is the main instrument for European Union (EU) aid for development cooperation in Africa, the Caribbean, and Pacific (ACP Group) countries and the Overseas Countries and Territories (OCT). Funding is provided by voluntary [1] donations by EU member states. The EDF is subject to its own financial rules and procedures, and is managed by the European Commission (EC) and the European Investment Bank

quarter. The European Investment Bank is also prepared to support energy projects in the area of power supply. The energy sector and the Niger Delta should become the focus for increased attention over the coming years. Areas of cooperation could cover technical level support, the environmental dimension, with a view to repairing and avoiding some of the damage caused by inadequate controls on oil extraction in the Niger Delta, and the development of renewable energy. 2.2. Renewable Energies On the last point, the attention devoted in Nigeria to the development of renewable energy resources has been minimal up to the present, although a hydroelectric power project is due to come on stream soon on the Mambilla Plateau in the northeast of the country. The development of non-hydrocarbon energy supplies may now be given greater prominence as part of the general policy of economic diversification to reduce oil dependency and it could be a solution to the problem of transmitting power to isolated areas (Rural Electrification). 2.3. Nigeria Energy Services market development Although dominant in revenue terms, the oil sector employs only 0.15 % of Nigerias labour force, while for example the agricultural sector accounts for some 70 %. The development of forward linkages from oil extraction remains limited. Nigeria imports about 90 % of its domestically consumed petroleum products as its four refineries are frequently inoperative because of poor maintenance. Some 95 % of all the primary products which the EU imported from Nigeria in 2007 consisted of oil and gas, but this amounted to only 2.8 % of EU-27 imports of primary energy materials. Although the EU exports more to Nigeria than to any other ACP State, the volume of trade remains very low. In 2007, exports to Nigeria accounted for 0.7 % of all EU exports, while imports from Nigeria amounted to 0.7 % of the EU total. It is acknowledged that the heavy dependence of Nigeria on oil and gas for its export earnings is undesirable. It is therefore encouraging that faster output growth has been achieved in recent years in the non-oil sector and particularly in agriculture. Consideration may be given among other things to gas flaring and renewable energies owing to their close link with climate change and environmental issues in Nigeria and with EU policies. 2.4. Institutional Frameworks for Energy management

The Seven Point Agenda, announced in 2007, gives another general direction to the activities of the Federal Government. It focuses on energy supply, peaceful settlement of the Niger Delta situation and the deepening of respect for the rule of law. While the priorities are clear, it nevertheless remains the case that the document has not yet been translated into a national development plan and merged with the NEEDS-2 draft, with the detailed programming of actions which that would entail. The Government plans to articulate its development agenda in a three-pronged approach: first the Seven Point Agenda will give a short-term plan focusing on quick service delivery, secondly the Government has taken steps to prepare a national development plan (2009-2011) by September 2009, and finally a long-term vision will be developed at the same time, Vision 2020, which was formally launched in April 2008. The latter is intended to provide a comprehensive presentation of national priorities and to constitute a broad forum for discussion involving civil society, the private sector, the diaspora, and external aid partners. Among the difficulties now facing the Government at both federal and state levels is the lack of data and the scarcity of monitoring capacity.

2.5. Rural Electrification 2.6. Nuclear safety