51. Intelligence Assessment Prepared in the National Foreign Assessment Center, Central Intelligence Agency1
Nigeria: Oil and Politics [classification marking not declassified]
Key Judgments
Following the overthrow of the Shah of Iran last winter, the Nigerian military government adopted an aggressive oil policy that for the first time involved the use of Nigerian oil as a political weapon. The Nigerians were able to take advantage of the tight world oil market and record prices that allowed production cuts without a significant loss in vital petroleum revenues. [classification marking not declassified]
The new government of President Shagari—Nigeria’s first civilian administration in 13 years—has been too busy setting up house to do much on the oil front. Shagari, however, has announced he too will be quick to use the oil weapon if necessary in pursuit of majority rule in southern Africa. He has given no indication that he plans to revise aggressive oil-related decisions by the military government. [classification marking not declassified]
The Nigerians will be watching the United States closely in the coming months for any sign that it is softening its opposition to minority rule in southern Africa. In addition, Washington has been on notice since last May that it will risk the US status as a “preferred” customer if it fails to approve the importation of Nigerian liquefied natural gas—seen by Lagos as an important potential source of foreign exchange to offset an expected decline in oil exports after the mid-1980s.2 [classification marking not declassified]
We doubt that the new government will impose an oil embargo against the United States, because it would be difficult to enforce. Lagos has other effective and more easily executed options, including imposing a selective cutback on oil production by US companies, a ban on company purchases of government-owned crude, or nationalization of the companies’ remaining equity in Nigerian oil. [classification marking not declassified]
[Page 155]Potential technical and labor problems and increasing domestic demand also could affect Nigeria’s role as a major supplier. We doubt that Nigeria will experience labor unrest on the Iranian scale. But a number of potential flashpoints—including tribal conflicts and resentment over privileges held by expatriate personnel—eventually may provoke trouble that would severely test the new civilian government’s ability to handle disruptions as effectively as previous military regimes. [classification marking not declassified]
[Omitted here are a map of petroleum locations in Nigeria and the body of the paper.]
- Source: Carter Library, Donated Material, Mondale Papers, Box 35, Vice President’s Visit to West Africa [7/17/80–7/23/80] Background, Stan Turner’s Background Reading. Secret; [handling restriction not declassified]. Prepared by [name not declassified], Africa Division, Office of Political Analysis and coordinated with the Office of Economic Research, the Directorate of Operations, and the National Intelligence Officer for Africa.↩
- See Document 45.↩