≡ While gunfire errupted in Niger's capital, traders who mistook the country for oil-rich Nigeria sent oil prices soaring Niger, Nigeria and the oil price rise MERLIN FLOWER | 2010/02/24 What's in a name? Niger or Nigeria will be in a better position to answer this question. If not anything the confusion in the name pushed oil prices to $80 a barrel last week. How? There was a coup in Niger and traders hustled to buy oil, mistaking Niger for oil rich Nigeria. Mistaken identity On February 18, a coup took place in the West African country, Niger. Armed soldiers stormed the presidential palace in Niamey, the capital of the country and kidnapped the President of the country Mamadou Tandja. The coup was orchestrated by a soldier named Colonel Adamou Haroun. He was aided by another Colonel Djibril Hamidou. This is the third coup in the country since the 90's. In dramatic style, the soldiers declared on TV, the suspension of the constitution and all the institutes associated with it. Colonel Goukoye Abdul Karimou, read a statement on behalf of a group called Supreme Council for the Restoration of Democracy (CSRD). In the statement he appealed to everyone to have faith in the group's ideas which "could turn Niger into an example of democracy and of good governance". The coup wasn't entirely unexpected. President Tandja came to power after the election in 1999. He was supposed to step down on Dec 22. However, he chose instead to change the country's constitution last year to stay on. The move enabled him to stand for a third time in office, and with more powers without election. The fifteen nation West African regional bloc, ECOWAS (Economic Community of West African States) reacted by suspending Niger. The US terminated non-humanitarian aids and cut off trade benefits. The US state department spokesman Philip Crowley said "President Tandja has been trying to extend his mandate in office. And obviously, that may well have been, you know, an act on his behalf that precipitated this act today". African Union chief Jean Ping condemned the military coup in Niger and said he was following developments "with concern". The reaction from Nigeria, coincidence or not, does take pains to differentiate between the countries. According to a statement by Senior Special Assistant to the Acting President on Media and Publicity, Mr Ima Niboro, the acting President of Nigeria Dr. Goodluck Ebele Jonathan has expressed deep concern over reports of shooting in Niger's capital. Meanwhile, Colonel Djibrilla Hima one of the leaders of the coup said that their group would hold election too. The plan, he said, is to hold elections once the situation has stabilized. Oil in Niger Niger has in recent years attracted billions of dollars as investment in oil. Exploration in Niger began in the 1950s. Drilling was done in the 60's by Petropar in Tamesna-Talak and Djado blocks. But the two main blocks that emerged were Djado Basin and the Agadem Basin In the year 1992, the Djado permit was given to Hunt oil. In 1997 the Tenere permit was given to TG World Energy Inc. In 2004 the Niger government approved the joint venture arrangement between CNPC International Tenere Limited (CNPCIT) and TG World Petroleum Limited (subsidiary of TG World). In 2005, Petronas Carigali Niger Exploration & Production Ltd. (PCNEPL), announced that it had found hydrocarbons in the Agadem Block Esso and Petronas had sole rights to the Agadem block. But in 2008, the rights were transferred to CNPC for USD$5 Billion investment. The oil reserves in the block are estimated at 325 million barrels. The company is also building a 20,000-barrel-per-day refinery in Zinder. Other oil companies in the region are Shell, ExxonMobil and Chevron Thus, though Niger isn't a major player in the oil business, the markets reached on hearing news of the coup. Tom Bentz, analyst at BNP Paribas Commodities said, "Markets took off at around the same time a Reuters story came out about gunfire erupting in the Niger capital in an apparent coup bid, mistaken by many as being Nigeria". To be fair, other factors too contributed for the increase in oil prices-tension of Iran's nuclear program, weaker dollar and the report of EIA on heating oil supply falling by 1.4 million barrels. However, among the factors, the name confusion was the most important reason for the immediate oil price rise. Yet, the fact remains that Niger is yet to produce oil for the world market. Niger facts Capital Niamey Neighbours Nigeria, Benin, Burkino Faso, Mali, Algeria, Libya and Chad Population 15.3 million Currency West African CFA franc Official language French. The country got independence from France in 1960 Main religion Islam Leading producer of Uranium more than 8 percent of world's Uranium. Published on 2010/02/24 by MERLIN FLOWER « Previous Oil War in the Falkland Islands Next » Petrobras discovers oil again Learn from our Research We share professional crude oil price intelligence, research and insights. Unsubscribe at any time. 60,000+ people are now receiving our research. Send me FREE oil intelligence updates (We keep your info confidential) Leave Your Reply Free oil price dashboard on your site: You too can show the crude oil price dashboard on your site. The dashboard displays the settlement price of crude oil or other commodities. You only need to copy and paste the code on your page. 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