Nigeria depends heavily on oil and gas, with hydrocarbon activities providing around 65 percent of total government revenue and 95 percent of export revenues.  While Nigeria supplies some LNG to world markets and is starting to export a small amount of gas to Ghana via pipeline, the great majority of the country's hydrocarbon earnings come from oil.  In 2008, Nigeria was the 5^th largest oil exporter and 10^th largest holder of proved oil reserves in the world according to the U.S. Energy Information Administration.  The country's national oil company NNPC (Nigerian National Petroleum Corporation) sits at the nexus between the many interests in Nigeria that seek a stake in the country's oil riches, the government, and the private companies that actually operate the vast majority of oil and gas projects.

Through its many divisions and subsidiaries, NNPC serves as an oil sector regulator, a buyer and seller of oil and petroleum products, a technical operator of hydrocarbon activities on a limited basis, and a service provider to the Nigerian oil sector.  With isolated exceptions, NNPC is not very effective at performing its various oil sector jobs.  It is neither a competent oil company nor an efficient regulator for the sector.   Managers of NNPC's constituent units, lacking the ability to reliably fund themselves, are robbed of business autonomy and the chance to develop capability.  There are few incentives for NNPC employees to be entrepreneurial for the company's benefit and many incentives for private action and corruption.  It is no accident that NNPC operations are disproportionately concentrated on oil marketing and downstream functions, which offer the best opportunities for private benefit.  The few parts of NNPC that actually add value, like engineering design subsidiary NETCO, tend to be removed from large financial flows and the patronage opportunities they bring. 

Although NNPC performs poorly as an instrument for maximizing long-term oil revenue for the state, it actually functions well as an instrument of patronage, which helps to explain its durability.  Each additional transaction generated by its profuse bureaucracy provides an opportunity for well-connected individuals to profit by being the gatekeepers whose approval must be secured, especially in contracting processes.  NNPC's role as distributor of licenses for export of crude oil and import of refined products also helps make it a locus for patronage activities.  Corruption, bureaucracy, and non-market pricing regimes for oil sales all reinforce each other in a dysfunctional equilibrium that has proved difficult to dislodge despite repeated efforts at oil sector reform.

An Abstract

All too frequently, students of democracy and democratization view the politics they analyze exclusively through the prism of constitutions, elections, and political actors. In the case of the Middle East, this involves worn out questions of religious fundamentalism, neo-colonialism, entrenched autocracy, the politics of oil and Israel, etc. While all of these are indeed relevant to understanding the perseverance of authoritarian political structures, it is equally crucial to understand the dynamics of culture, and the ways in which forms of cultural expression are developing, and are channeled and managed. In his recent  analysis of the region, Hicham Ben Abdallah points out that, while legal and political authorities certainly define the contours of what is permissible or not, it is the shared system of collective beliefs which in turn shapes the law and politics, and it is in the realm of culture that these shared beliefs are produced and consumed.  The wearing of veil, for example, is not mandated by any legislation outside of Saudi Arabia and Iran, and yet it a growing practice throughout the region, part of an increasingly powerful salafist ideological norm that is at least as powerful as any law.

Contrary to the hastily-borrowed western-paradigm of an inexorable development of secularism leading to an inevitable development of democracy, Ben Abdallah demonstrates the proliferation of cultural practices in which result societies, and individuals, learn to live in a complex mix of parallel and conflicting ideological tendencies -- with the increasing Islamicization of everyday ideology developing alongside the proliferation of de-facto secular forms of cultural production, even as both negotiate for breathing room under the aegis of an authoritarian state. 

He finds any prospects for democratization complicated by parallel tacit alliances.  On the one hand, a modus vivendi between the state and fundamentalists, in which the latter is permitted to Islamicize society, and is sometimes allowed a carefully-delimited participation in state structures, under the condition they restrain from attempting radically to reform the state. On the other hand  intellectuals and artists refrain from frontal assaults on autocratic state structures, subtly limiting their militancy to non-controversial causes, while seeking the state's protection from extremism; their aim is to maintain some protected space of quasi-secular liberalism in the present, which they hope portends the promise of democracy to come.

For its part, the state is learning how to manage and take advantage of a segmented cultural scene by posing as the restraining force against extreme enforcement of the salafist norm, and by channeling forms of modernist cultural expression into established systems  of institutional and patronage rewards (for "high" culture) and into a commercialized process of "festivalization" (for popular culture) that ends up as a celebration of an abstract, de politicized "Arab" identity.

Ben Abdallah refers us to the deep history of Islam, which protected and developed divergent cultural and intellectual influences as the patrimony of mankind. He suggests a new paradigm of cultural and intellectual discourse, inspired by this history while also understanding the necessity for political democratization and cultural modernism. We must, he argues, be unafraid to face the challenges in the tension between the growing influence of a salafist norm and the widespread embrace of new, implicitly secular, cultural practices throughout the Arab world.

Version in English at Le Monde Diplomatique, "The Arab World's Cultural Challenge"

In recent years, much attention has focused on the dangers of dependency on energy imports. Fears of energy import dependency are particularly acute in Eastern Europe, where most countries remain heavily dependent on Russian gas, but similarly dependent relationships exist across the globe. Most energy security research focuses on exporters; this thesis contributes to the study of energy security by exploring the effects of energy dependence on importers. It examines data from 167 dyadic oil and gas trade relationships (1990-2008) to answer two questions.

First, does gas import dependency have a more profound effect on foreign policy
creation than oil dependency? Structural factors predict it should and the study confirms this empirically.

Second, what factors exacerbate or mitigate the foreign policy effects of gas import
dependency? The study identifies three quantifiable factors that tend to increase the foreign
policy affinity importers display towards their suppliers, and two quantifiable factors that tend to reduce the foreign policy affinity importers show towards their suppliers.

Three case studies (Japan/Indonesia, Argentina/Bolivia, and Poland/Russia) confirm the
plausibility of these statistical findings. They also highlight how the ownership structure of gas production and distribution can mitigate, or exacerbate, the foreign policy effects of gas imports.

This study is intended to be useful to policymakers gauging the impact of gas import
dependency.

Executive summary:

Statoil was founded in 1972 as the national oil company (NOC) of Norway.  Along with Brazil's Petrobras, Statoil today is a leader in several technological areas including operations in deep water.  With its arm's length relationship to the Norwegian government and partially-private ownership, it is generally considered to be among the state-controlled oil companies most similar to an international oil company in governance, business strategy, and performance.

Statoil's development and performance have been intimately connected to its relationship with the Norwegian government over the years.  The "Norwegian Model" of distinguishing Statoil's commercial responsibilities in hydrocarbons from regulatory and policy functions granted to other government bodies has inspired admiration and imitation as the canonical model of good bureaucratic design for a hydrocarbons sector. 

However, the reality is that Norway's comparative success in hydrocarbons development, and that of Statoil, has been about much more than a formula for bureaucratic organization.  Belying the notion of a pristine "Norwegian Model" that unfolded inexorably from a well-designed template, the actual development of Norway's petroleum sector at times was, and often still is, a messy affair rife with conflict and uncertainty.  But Norway had the advantage of entering its oil era with a mature, open democracy as well as bureaucratic institutions with experience regulating other natural resource industries.  Thus far, the diverse political and regulatory institutions governing the petroleum sector-and governing the NOC-have collectively proven robust enough to handle the strains of petroleum development and correct the worst imbalances that have arisen. 

Mark Thurber and Benedicte Tangen Istad make the following six principal observations from their research.

First, Norway's policy orientation from the start was focused on maintaining control over the oil sector, as opposed to simply maximizing revenue.  As a result, the country was more concerned with understanding and mitigating the possible negative ramifications of oil wealth than with any special advantage that could be gained from it. 

Second, the principal means through which Norway was able to exert control over domestic petroleum activities was a skillful bureaucracy operating within a mature and open political system.  Civil servants gained knowledge of petroleum to regulate the sector through systematic efforts to build up their own independent competence, enabling them to productively steer the political discourse on petroleum management after the first commercial oil discovery was made.  Robust contestation between socialist and conservative political parties also helped contribute to a system of oil administration that supported competition (including between multiple Norwegian oil companies as well as international operators) and was able to evolve new checks and balances as needed.

Third, Statoil did play an important role in contributing to the development of Norwegian industry and technological capability, in large part because it had the freedom to take a long-term approach to technology development.  With a strong engineering orientation and few consequences for failure as a fully state-backed company, Statoil developed a culture valuing innovation over development of a lean, commercially-oriented organization.  These priorities may not have always contributed to maximization of government revenues in the short run-costs came to be perceived as high in Norway (for various reasons not all related to Statoil) and Statoil was on occasion responsible for significant overruns.  However, the focus on innovation contributed to significant technological breakthroughs and helped spur the development of a high-value-added domestic industry in oil services.

Fourth, the formal relationship between Statoil and the government has become more arm's-length as Norway's resources and oil expertise have matured.  Under its first CEO, experienced Labour politician Arve Johnsen, Statoil aggressively flexed its political muscles to gain special advantages in licensing and access to acreage.  As domestic resources began to mature, Statoil's leadership (starting with Harald Norvik in 1988, and continuing through the tenures of subsequent CEOs Olav Fjell and Helge Lund) focused more on forging an independent corporate identity and governance structure that would allow the company to compete effectively abroad. 

Fifth, notwithstanding changes in their formal relationship, it has remained impossible to sever the close ties between the Norwegian state and a company with the domestic significance of Statoil.  These residual ties can manifest in various ways, including: 1) the effect on policy decisions of direct personal connections between Statoil leaders and politicians; 2) persistent "Norway-centric" influences on Statoil's strategy even in the larger context of efforts to internationalize; and 3) public pressure from politicians who continue to see themselves as Statoil's masters.  Such pressures can affect large strategic companies, public or private, in any country, but their effect is magnified by Norway's small size and Statoil's importance within it as the largest petroleum developer.

Sixth, Statoil's experience thus far casts doubt upon the conventional wisdom that NOC-NOC connections provide material benefit in opening resource access around the world.  To the extent that such linkages are important, Statoil would seem to be among the best-positioned to benefit from them as both a highly competent producer and a company that might be sympathetic to the needs of resource-rich countries.  However, there are few instances so far where Statoil's status as an NOC has been an obviously decisive factor in unlocking resources that would otherwise be off-limits.