700 
MINERALS YEARBOOK, 1978-79 
 
 
 After expiration of its contract, Japan's Nigeria Oil withdrew even though
it ma4e finds at 6 of its 18 offshore wells. Reserves in this area, estimated
at 30 million barrels, were considered noncommercial under 1978-79 production
terms. Italy's' AGIP, the Spanish-state-owned Hispanoil, and the, Crown Central
oil company all signed new exploration contracts under NNPC's new terms.
AGIP was to carry all risks in exchange for 50% of production from com~ mercial
finds to cover expense, investment, and profit. If this oil does not cover
cost, NNPC will sell additional ' oil to AGIP at market price in addition
to 50% of production. Hispanoil's and Crown Central's agreements were described
as service contracts. AGIP was to develop its Nembe Creek discovery at an
output of 60,000 barrels per day. AGIP's Utapate South discovery was also
under development. 
 Texaco Overseas (Nigeria) tested the Funiwal-1 well at 1,007 barrels per
day in the ' offshOre block held by NNPC (55%), Chevron Oil Co.' (Nigeria)
(22.5%) and Standard Oil of California (22.5%). The find occurred in water~
40 feet deep, 6 miles offshore. A new offshore field was also discovered
by AGIP on the OML-62 area of the Niger Delta. The crude was 28.3% API from
deeper levels and 20.3% API from upper levels in the Beniboye North-i discovery
well. The well tested a maximum flow of 3,100 barrels per day.' 
 Refining.—Nigeria's new refinery at Warn started ' production
on September
19, 1978. Constructed by the Italian company Snamprogetti, the Wa~ri refinery
was stopped temporarily in December a few months after its startup because
of technical difficulties. With a crude petroleum capacity of 100,000 barrels
per day, the new refinery 
was designed to process crude from ShellBP's Ughelli blending, station and
from Gulf's Escravos terminal. A full range of products were being produced
with facilities capable of producing a high proportion of light products
for the local market. Refined products were to be distributed ' though a
3,000-kilometer network of pipelines and 19 storage facilities still under
construction. Including the Port Harcourtrefinery, which had a 60,000-barrel-per-day
capacity, the total national refined product output was expected to be 43.8
million barrels per. year. Current consumption, running at 67.5 million barrels
per year was increasing at about 25% annually. The third refinery (100,000.
barrels of crude oil per day) under construction at Kaduna was expected to
be operational by 1980. 
 
 1Physical scientist, Branéh ' of Foreign Data. 
 2Where necessary, values have been converted from 
Nigerian nairá (N) to U.S. dollars at the rate"~ of 
N1.OO=US$1.56 ' for 1978 and at the rate of 
N1.OO=US$1.75 for 1979. 
 3The Financial Times (London). Nigeria Sets 10% Tax Hurdle for Foreign Airlines
and Shipping. July 17, 1978, p. 
 
 4The Financial Times (London). Black Africa Towards Local Control. May 30,
1978, p.31. 
 5US. Embflssy, Lagos, Nigeria. Department of State Airgram A-~7, July 31,
1979, 13 pp. 
 6lnternational Monetary Fund (Washington, D.C.). international Financial
Statistics. V. 32, No. 3, March, 1979, 
pp. 280-283. '  
 7Petroleum Economist. U.S. Crude Oil Imports, Rise Confirmed. V. 46, No.3,
p.90. 
 8Marches ,Tropicaux et Mediterraneens (Paris). West German Aid Detailed.
May 18, l979,'pp. 1235-1236. 
 9Marches Tropicaux et Mediterraneens (Paris). Soviet~ African Trade Statistics'
Detailed. May 25, 1979, pp. 1292- 
 
 10Mining Journal (London). Jamaica - Nigeria Commodities Agreement. Oct.
27, 1978, p. 332. 
 ' 1The Financial Times (London). Oil Barter Negotiations. June 28, 1978,
p. 6. 
 ' 2The Financial Times (London). Nigerian Accounts Blocked in (Paris). Oct.
7, 1978, p. 28. 
 13Business Times (Lagos). Cement Surplus. Jan. 15, 1980, p. 20. 
 ' 4Business Times (Lagos). Coal Industry Prospects Discussed. Apr. 24, 1979,
p. 32.