The
petroleumPetroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
industry in
NigeriaNigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
is the largest industry and main generator of GDP in the West African nation which is also the continent's most populous. Since the British discovered oil in the
Niger DeltaThe Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil...
in the late 1950s, the oil industry has been marred by political and economic strife largely due to a long history of corrupt military regimes and complicity of multinational corporations, notably
Royal Dutch ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
. Despite this, it was not until the early 1990s that the situation was given international attention, particularly following the execution by the Nigerian state of playwright and activist
Ken Saro-WiwaKenule "Ken" Beeson Saro Wiwa was a Nigerian author, television producer, environmental activist, and winner of the Right Livelihood Award and the Goldman Environmental Prize...
, provoking the immediate suspension of Nigeria from the
Commonwealth of NationsThe Commonwealth of Nations, normally referred to as the Commonwealth and formerly known as the British Commonwealth, is an intergovernmental organisation of fifty-four independent member states...
. Nigeria is identified by the international community and the firms in operation there as a major concern with regard to human rights and
environmental degradationEnvironmental degradation is the deterioration of the environment through depletion of resources such as air, water and soil; the destruction of ecosystems and the extinction of wildlife...
. The Nigerian government, oil corporations, and oil-dependent Western countries have been criticised as too slow to implement reforms aimed at aiding a desperately under-developed area and remediating the unsustainable environmental degradation that petroleum extraction has wrought.
Production and exploration
As of 2000, oil and gas exports accounted for more than 98% of
export earningsThe term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
and about 83% of federal government revenue, as well as generating more than 40% of its GDP. It also provides 95% of
foreign exchange earningsThe foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
, and about 65% of government
budgetary revenuesIn business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
.
Nigeria's proven oil reserves are estimated by the
U.S. United States Energy Information AdministrationThe U.S. Energy Information Administration is the statistical and analytical agency within the U.S. Department of Energy. EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and...
(EIA) at between 16 and 22 Goilbbl, but other sources claim there could be as much as 35.3 Goilbbl. Its reserves make Nigeria the tenth most petroleum-rich nation, and by the far the most affluent in Africa. In mid-2001 its crude oil production was averaging around 2.2 million barrels (350,000 m³) per day.
Nearly all of the country's primary reserves are concentrated in and around the delta of the
Niger RiverThe Niger River is the principal river of western Africa, extending about . Its drainage basin is in area. Its source is in the Guinea Highlands in southeastern Guinea...
, but off-shore rigs are also prominent in the well-endowed coastal region. Nigeria is one of the few major oil-producing nations still capable of increasing its oil output. Unlike most of the other OPEC countries, Nigeria is not projected to exceed
peak productionThe Hubbert peak theory posits that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve...
until at least 2009. The reason for Nigeria's relative unproductivity is primarily OPEC regulations on production to regulate prices on the international market. More recently, production has been disrupted intermittently by the protests of the Niger Delta's inhabitants, who feel they are being exploited.
Nigeria has a total of 159 oil fields and 1481
wellsAn oil well is a general term for any boring through the earth's surface that is designed to find and acquire petroleum oil hydrocarbons. Usually some natural gas is produced along with the oil. A well that is designed to produce mainly or only gas may be termed a gas well.-History:The earliest...
in operation according to the Ministry of Petroleum Resources. The most productive region of the nation is the coastal Niger Delta Basin in the
Niger DeltaThe Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil...
or "South-south" region which encompasses 78 of the 159 oil fields. Most of Nigeria's oil fields are small and scattered, and as of 1990, these small unproductive fields accounted for 62.1% of all Nigerian production. This contrasts with the sixteen largest fields which produced 37.9% of Nigeria's petroleum at that time. As a result of the numerous small fields, an extensive and well-developed pipeline network has been engineered to transport the crude. Also due to the lack of highly productive fields, money from the jointly operated (with the federal government) companies is constantly directed towards petroleum exploration and production.
Nigeria's petroleum is classified mostly as "light" and "sweet", as the oil is largely free of sulphur. Nigeria is the largest producer of
sweet oilSweet crude oil is a type of petroleum. Petroleum is considered "sweet" if it contains less than 0.5% sulfur, compared to a higher level of sulfur in sour crude oil. Sweet crude oil contains small amounts of hydrogen sulfide and carbon dioxide. High quality, low sulfur crude oil is commonly used...
in OPEC. This sweet oil is similar in composition to petroleum extracted from the
North SeaIn the southwest, beyond the Straits of Dover, the North Sea becomes the English Channel connecting to the Atlantic Ocean. In the east, it connects to the Baltic Sea via the Skagerrak and Kattegat, narrow straits that separate Denmark from Norway and Sweden respectively...
. This crude oil is known as "Bonny light". Names of other Nigerian crudes, all of which are named according to export terminal, are Qua Ibo, Escravos blend, Brass river, Forcados, and Pennington Anfan.
The U.S. remains the largest importer of Nigeria's crude oil, accounting for 40% of the country's total oil exports. Nigeria provides about 10% of overall U.S. oil imports and ranks as the fifth-largest source for oil imports in the U.S.
There are six petroleum exportation terminals in the country. Shell owns two, while Mobil, Chevron, Texaco, and Agip own one each. Shell also owns the Forcados Terminal, which is capable of storing 13 Moilbbl of crude oil in conjunction with the nearby Bonny Terminal. Mobil operates primarily out of the Qua Iboe Terminal in Akwa Ibom State, while Chevron owns the Escravos Terminal located in
Delta StateDelta State may refer to:*Delta State, a state in southern Nigeria.*Delta State , a Canadian animated television series.*Delta State University, a public university located in the U.S. state of Mississippi....
and has a storage capacity of 3.6 Moilbbl. Agip operates the Brass Terminal in Brass, a town 113 km southwest of
Port Harcourt and has a storage capacity of 3558000 barrels (565,676.8 m³). Texaco operates the Pennington Terminal.
Offshore
Oil companies in Africa investigate offshore production as an alternative area of production. Deepwater production mainly involves underwater drilling that exists 400 m or more below the surface of the water. By expanding to deep water drilling the possible sources for finding new oil reserves is expanded. Through the introduction of deep water drilling 50% more oil is extracted than before the new forms of retrieving the oil.
AngolaAngola, officially the Republic of Angola , is a country in south-central Africa bordered by Namibia on the south, the Democratic Republic of the Congo on the north, and Zambia on the east; its west coast is on the Atlantic Ocean with Luanda as its capital city...
and
NigeriaNigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
are the largest oil producers in Africa. In Nigeria, the deepwater sector still has a large avenue to expand and develop. The amount of oil extracted from Nigeria is expected to expand from 15000 oilbbl/d in 2003 to 1.27 Moilbbl/d in 2010. Deepwater drilling for oil is especially attractive to oil companies because the Nigerian government has very little share in these activities and it is more difficult for the government to regulate the offshore activities of the companies. Also, the deepwater extraction plants are less disturbed by local militant attacks, seizures due to civil conflicts, and sabotage. These advancements offer more resources and alternatives to extract the oil from the Niger Delta, with hopefully less conflict than the operations on land.
Natural gas
Natural gas reserves are well over 187 trillion ft³ (2,800 km³), the gas reserves are three times as substantial as the crude oil reserves. The biggest natural gas initiative is the Nigerian Liquified Natural Gas Company, which is operated jointly by several companies and the state. It began exploration and production in 1999. Chevron is also attempting to create the Escravos Gas Utilization project which will be capable of producing 160 million standard ft³ of gas per day.
There is also a gas pipeline, known as the
West African Gas PipelineThe West African Gas Pipeline is a natural gas pipeline to supply gas from Nigeria's Escravos region of Niger Delta area to Benin, Togo and Ghana...
, in the works but has encountered numerous setbacks. The pipeline would allow for transportation of natural gas to
BeninBenin , officially the Republic of Benin, is a country in West Africa. It borders Togo to the west, Nigeria to the east and Burkina Faso and Niger to the north. Its small southern coastline on the Bight of Benin is where a majority of the population is located...
, Ghana,
TogoTogo, officially the Togolese Republic , is a country in West Africa bordered by Ghana to the west, Benin to the east and Burkina Faso to the north. It extends south to the Gulf of Guinea, on which the capital Lomé is located. Togo covers an area of approximately with a population of approximately...
, and
Cote d'IvoireThe Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
. The majority of Nigeria's natural gas is flared off and it is estimated that Nigeria loses 18.2 million US$ daily from the loss of the flared gas.
Downstream
Nigeria's total petroleum refining capacity is 445000 oilbbl/d, however, only 240000 oilbbl/d was allotted during the 1990s. Subsequently crude oil production for refineries was reduced further to as little as 75000 oilbbl/d during the regime of Sanni Abacha. There are four major oil refineries: the Warri Refinery and Petrochemical Plant which can process 125 Moilbbl of crude per day, the New Port Harcourt Refinery which can produce 150 Moilbbl/d (there is also an 'Old' Port Harcourt Refinery with negligible production), as well as the now defunct Kaduna Refinery. The Port Harcourt and
WarriWarri is a major oil city in Delta State, Nigeria, with a population of over 300,000 people. The people of Warri are mainly the Urhobos, Itsekiris, and Ijaws, but other ethnic groups also live within the city. Warri is predominantly Christian, as is most of Southern Nigeria...
Refineries both operate at only 30% capacity.
It is estimated that demand and consumption of petroleum in Nigeria grows at a rate of 12.8% annually. However, petroleum products are unavailable to most Nigerians and are quite costly, because almost all of the oil extracted by the multinational oil companies is refined overseas, while only a limited quantity is supplied to Nigerians themselves.
History and politics
Prior to its official amalgamation into the Colony and Protectorate of Nigeria by the military forces of the
British EmpireThe British Empire comprised the dominions, colonies, protectorates, mandates and other territories ruled or administered by the United Kingdom. It originated with the overseas colonies and trading posts established by England in the late 16th and early 17th centuries. At its height, it was the...
in 1914, the territory of Nigeria was a loose collection of autonomous states, villages, and ethnic communities. Many of these established themselves as pillars of art, trade, and politics in West Africa as late as the 19th century; four of these cultural entities, the
Hausa-FulaniHausa-Fulani is a term used to refer collectively to the Hausa and Fulani people of West Africa. The two are grouped together because since the Fulani War their histories have been largely intertwined...
,the
IgboIgbo people, also referred to as the Ibo, Ebo, Eboans or Heebo are an ethnic group living chiefly in southeastern Nigeria. They speak Igbo, which includes various Igboid languages and dialects; today, a majority of them speak English alongside Igbo as a result of British colonialism...
(sometimes spelled
Ibo), the
YorubaThe Yoruba people are one of the largest ethnic groups in West Africa. The majority of the Yoruba speak the Yoruba language...
and the Efik grew extremely prominent in the region before the arrival of foreigners, dictated British colonial policies, and dominate national politics in Nigeria to this day.
The modern
HausaThe Hausa are one of the largest ethnic groups in West Africa. They are a Sahelian people chiefly located in northern Nigeria and southeastern Niger, but having significant numbers living in regions of Cameroon, Ghana, Cote d'Ivoire, Chad and Sudan...
and Fulani societies in northern Nigeria are the cultural successors of the Sokoto Caliphate, a theocratic state founded by Muslim reformer empire-maker Uthman dan Fodio in 1817. Geographically isolated in the north, the Caliphate was governed by Islamic laws as prescribed by dan Fodio's
Kitab al-Farq and maintained greater links commercially and culturally to North Africa and the Arab states than to West Africa and the Atlantic.
By contrast, the
YorubaThe Yoruba people are one of the largest ethnic groups in West Africa. The majority of the Yoruba speak the Yoruba language...
, the
IgboIgbo people, also referred to as the Ibo, Ebo, Eboans or Heebo are an ethnic group living chiefly in southeastern Nigeria. They speak Igbo, which includes various Igboid languages and dialects; today, a majority of them speak English alongside Igbo as a result of British colonialism...
and the Efik in the south had regularly experienced contact with Europeans since at least the 16th century. A minority of southerners converted to Christianity even prior to the establishment of permanent British control; the majority followed traditional indigenous religions, worshipping myriad deities with vast domains spanning both cosmic and terrestrial spheres. Coastal Nigerians established thriving trade both regionally and abroad, fashioning the coast into a hub for products like palm oil, a good sought after by rapidly industrialising Europe, while also serving as key source for the slave trade prior to its international banning (the region came to be known as the
Slave CoastThe Slave Coast is the name of the coastal areas of present Togo, Benin and western Nigeria, a fertile region of coastal Western Africa along the Bight of Benin. In pre-colonial time it was one of the most densely populated parts of the African continent...
as a result).
The Niger Delta region, which is roughly synonymous with the
Niger Delta provinceThe Niger Delta province is a geologic province in the Niger Delta of West Africa also known as the Niger Delta Basin. The province contains one petroleum system, the "Tertiary Niger Delta Petroleum System" , the majority of which lies within the borders of Nigeria, with suspected or proven...
in location and the contemporary heart of the petroleum industry, is and was a zone of dense cultural diversity and is currently inhabited by roughly forty ethnic groups speaking an estimated 250 dialects. Some of the more relevant ethnic groups in the western part of the Niger Delta region include the Ijaw,
ItsekiriThe Itsekiri are an ethnic group of Nigeria's Niger Delta area, Delta State. The Itsekiri presently number between 800,000–1,000,000 people and live mainly in the Warri South, Warri North and Warri South West local government districts of Delta State on the Atlantic Coast of Nigeria...
, and
OgoniOgoni people are one of the many indigenous peoples in the region of southeast Nigeria. They share common oil related environmental problem with the Ijaw people of Niger Delta, but Ogonis are not listed in the list of people historically belonging to Niger Delta...
. The Ijaw (sometimes spelled
Ijo), the fourth most populous tribe in Nigeria and by far the largest in the Delta region, lived during late medieval times in small fishing villages within the inlets of the delta; however by the 16th century, as the slave trade grew in importance, Ijaw port cities like Bonny and Brass developed into major trading states which served as major exporters of fish and other goods regionally. Other states such as the those of
ItsekiriThe Itsekiri are an ethnic group of Nigeria's Niger Delta area, Delta State. The Itsekiri presently number between 800,000–1,000,000 people and live mainly in the Warri South, Warri North and Warri South West local government districts of Delta State on the Atlantic Coast of Nigeria...
domain of
WarriWarri is a major oil city in Delta State, Nigeria, with a population of over 300,000 people. The people of Warri are mainly the Urhobos, Itsekiris, and Ijaws, but other ethnic groups also live within the city. Warri is predominantly Christian, as is most of Southern Nigeria...
sprang up at this time as well.
The eastern Niger Delta region has the Efik people (
AnnangThe Annang is a cultural and ethnic group that lives in the Coastal Southeast Nigeria...
/ Efik /
Ibibio who are all related with a common language and ancestors were all referred to as Efik or
CalabarCalabar is a city in Cross River State, southeastern Nigeria. The original name for Calabar was Atakpa, from the Jukun language....
people in early Nigerian history). Their capital city at
CalabarCalabar is a city in Cross River State, southeastern Nigeria. The original name for Calabar was Atakpa, from the Jukun language....
located at the coastal southeast of Nigeria (eastern Niger Delta) served as the major trading and shipping center during the pre-colonial and colonial period. Calabar also served first capital of Nigeria and the point of entry of Western religion and Western education into southeastern Nigeria. The combined population of the
Ibibio,
AnnangThe Annang is a cultural and ethnic group that lives in the Coastal Southeast Nigeria...
and Efik people is the fourth largest language group in Nigeria.
The colonial legacy (1800s–1960s)
Even before the consolidation of British control over all of present day Nigeria's borders in 1914 from the protectorates of Southern and
Northern NigeriaNorthern Nigeria was a British protectorate formed in 1900. The basis of the protectorate was the 1885 Treaty of Berlin which broadly granted Northern Nigeria to Britain, on the basis of their protectorates in Southern Nigeria...
, British forces had begun imposing drastic political and economic policies on the Nigerian people which would lead to important consequences in the future. Originally this was done primarily through the government-owned
Royal Niger CompanyThe Royal Niger Company was a mercantile company chartered by the British government in the nineteenth century. It formed the basis of the modern state of Nigeria....
. The company was crucial in securing most of Nigeria's major ports and monopolised coastal trade; this resulted in the severing of ties which linked the area to the flourishing West African regional trade network, in favour of the exportation of cheap
natural resourcesNatural Resources is a soul album released by Motown girl group Martha Reeves and the Vandellas in 1970 on the Gordy label. The album is significant for the Vietnam War ballad "I Should Be Proud" and the slow jam, "Love Guess Who"...
and cash crops to industrialising nations. Most of the population eventually abandoned food production for such market-dependent crops (peanuts and cotton in the north, palm oil in the east, and cocoa in the west). From the beginning divide and rule tactics were employed by both traders and administrators by highlighting ethno-religious differences and playing groups against one another. After 1914, the north was permitted a system of
indirect ruleIndirect rule was a system of government that was developed in certain British colonial dependencies...
under authoritarian leaders, while in the south the British exercised control
directlyDirect rule was the term given, during the late 20th and early 21st centuries, to the administration of Northern Ireland directly from Westminster, seat of United Kingdom government...
.
Interest in Nigerian oil originated in 1914 with an ordinance making any oil and mineral under Nigerian soil legal property of the Crown. By 1938 the colonial government had granted the state-sponsored company, Shell (then known as Shell D'Arcy) monopoly over exploration of all minerals and petroleum throughout the entire colony. Commercially viable oil was discovered by Shell roughly 90 km west of the soon-to-be oil capital of
Port Harcourt at
OloibiriOloibiri is a small community in Ogbia LGA located in Bayelsa State, in the eastern Niger Delta region of Nigeria. Oloibiri is a historic town to the oil and gas industry in Nigeria...
(now in
Bayelsa StateBayelsa State is a state in southern Nigeria in the core Niger Delta region, between Delta State and Rivers State. Its capital is Yenagoa. The language spoken here is Ijaw language and dialects of the Ijaw language such as Nembe, Atissa, Akassa, Ogbia, etc. However, like the rest of Nigeria,...
) in 1956; initially a 50–50 profit sharing system was implemented between the company and the government. Until the late 1950s concessions on production and exploration continued to be the exclusive domain of the company, then known as
ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
-British Petroleum. However, other firms became interested and by the early 1960s
MobilMobil, previously known as the Socony-Vacuum Oil Company, was a major American oil company which merged with Exxon in 1999 to form ExxonMobil. Today Mobil continues as a major brand name within the combined company, as well as still being a gas station sometimes paired with their own store or On...
,
TexacoTexaco is the name of an American oil retail brand. Its flagship product is its fuel "Texaco with Techron". It also owns the Havoline motor oil brand....
, and
GulfGulf Oil was a major global oil company from the 1900s to the 1980s. The eighth-largest American manufacturing company in 1941 and the ninth-largest in 1979, Gulf Oil was one of the so-called Seven Sisters oil companies...
had purchased concessions.
In October 1960 Nigeria gained full independence from Britain with the British monarch continuing to preside as
Head of StateA head of state is the individual that serves as the chief public representative of a monarchy, republic, federation, commonwealth or other kind of state. His or her role generally includes legitimizing the state and exercising the political powers, functions, and duties granted to the head of...
, but the country quickly altered its relationship with its former colonizers by declaring Nigeria a republic of three federated states (the Eastern, Western and Northern Regions). But the flaring of ethnic tensions assured that this new republic would be short-lived, as on 15 January 1966, a small group of army officers consisting mostly southeastern
IgbosIgbo people, also referred to as the Ibo, Ebo, Eboans or Heebo are an ethnic group living chiefly in southeastern Nigeria. They speak Igbo, which includes various Igboid languages and dialects; today, a majority of them speak English alongside Igbo as a result of British colonialism...
, staged a successful coup d'etat against the civilian government. This federal military government which assumed power under General Aguiyi-Ironsi, was unable to quiet ethnic tensions or produce a constitution acceptable to all sections of the country. In fact, its efforts to abolish the federal structure exacerbated the growing unrest and led to another coup, led by largely northern officers in July of the same year. This second coup established the regime of Major General
Yakubu GowonGeneral Yakubu "Jack" Dan-Yumma Gowon was the head of state of Nigeria from 1966 to 1975. He took power after one military coup d'etat and was overthrown in another...
. Subsequently, the massacre of thousands of Igbo in the north prompted hundreds of thousands to return to the southeast, where increasingly strong Igbo secessionist sentiment emerged under the leadership of the Igbo military governor
Lieutenant ColonelLieutenant colonel is a rank of commissioned officer in the armies and most marine forces and some air forces of the world, typically ranking above a major and below a colonel. The rank of lieutenant colonel is often shortened to simply "colonel" in conversation and in unofficial correspondence...
Chukwuemeka Odumegwu OjukwuChukwuemeka Odumegwu Ojukwu was a Nigerian military officer and politician.Ojukwu served as the military governor of the Eastern Region of Nigeria in 1966, the leader of the breakaway Republic of Biafra from 1967 to 1970 and a leading Nigerian politician from 1983 to 2011, when he died, aged...
.
With tensions stoked between the Eastern region and Gowon's federal government, on 4–5 January 1967, in compliance with Ojukwu's desire to meet for talks only on neutral soil, a summit attended by Gowon, Ojukwu and other members of the Supreme Military Council was held at
AburiAburi is a town north east of Accra, the capital city of Ghana. It is famous for the Aburi Botanical Gardens. Aburi is home to Aburi Presbyterian Technical Secondary School, which is linked to The Sixth Form College, Farnborough in Hampshire, England. Aburi has a relatively small population and is...
in Ghana, the stated purpose of which was to resolve all outstanding conflicts and establish Nigeria as a
confederationA confederation in modern political terms is a permanent union of political units for common action in relation to other units. Usually created by treaty but often later adopting a common constitution, confederations tend to be established for dealing with critical issues such as defense, foreign...
of regions. The outcome of this summit was the
Aburi AccordAburi Accord was reached 1967 at a meeting attended by delegates of both the Federal Government of Nigeria and the Eastern delegates, led by the soon-to-become-Biafran leader Colonel Ojukwu. The meeting was billed to be the last chance of preventing all out war...
, the differing interpretations of which would soon cause Ojukwu to declare Biafran independence and plunge Nigeria into
civil warThe Nigerian Civil War, also known as the Nigerian-Biafran War, 6 July 1967–15 January 1970, was a political conflict caused by the attempted secession of the southeastern provinces of Nigeria as the self-proclaimed Republic of Biafra...
.
Implications and causes of civil war (1966–1970)
IgboIgbo people, also referred to as the Ibo, Ebo, Eboans or Heebo are an ethnic group living chiefly in southeastern Nigeria. They speak Igbo, which includes various Igboid languages and dialects; today, a majority of them speak English alongside Igbo as a result of British colonialism...
secessionism arose in part from the pogroms in the North that were aimed at Eastern people, most specifically, the Igbo. However, since the southeast encompassed most of the petroleum-rich
Niger DeltaThe Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil...
, the prospect emerged of the Eastern Region gaining self-sufficiency and increasing prosperity. The exclusion of easterners from power caused many in the east to fear that oil revenues would be used to benefit areas in the north and west rather than their own. The desire to accrue profits from oil revenues combined with ethnic tensions acted as a catalyst for the Igbo-spearheaded secession. Additionally, despite his denials in later years, it appears that Ojukwu's insistence on secession at the time was heavily influenced by his knowledge of the extent of the area's oil reserves.
On top of scores of deaths, the war had a largely negative impact on the oil industry. Strife caused production of crude to drop significantly, particularly in Biafra. Total crude output decreased from 420000 oilbbl/d in 1966 at the start of the war, to only 140000 oilbbl/d in 1968. Shell alone saw a drop from 367000 oilbbl/d in 1966, to 43,000 in 1968. And in addition to concerns about production, oil companies began experiencing uncertainty as to the future of their investments depending on who prevailed in the war. This led to relations between oil companies and the federal government becoming strained, with the government at one point accusing the oil company Safrap (now TotalFinaElf, but
ElfElf Aquitaine was a French oil company which merged with TotalFina to form TotalFinaElf. The new company changed its name to Total in 2003...
until 1974) of favouring Biafra and enlisting the aid of France for the Biafran cause. Shell, the other major holder of concessions in the southeast, was concerned but placated and limited politically by Britain's staunch support of the Nigerian government in the war effort.
Despite oil's prominent role in national affairs, up to this time, the Nigerian federal government had only limited involvement in the
oil industryThe petroleum industry includes the global processes of exploration, extraction, refining, transporting , and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline...
, and the government confined its financial involvement in the oil industry to taxes and
royaltiesRoyalties are usage-based payments made by one party to another for the right to ongoing use of an asset, sometimes an intellectual property...
on the oil companies. The companies were subsequently able to set their own price on the petroleum they extracted, and dominated petroleum to such a point that laws governing the oil sector were having a negative effect on Nigerian interests. However, even during the conflict with Biafra would force changes to the relationship between federal government and the petroleum industry. Gowon's military government instituted the 1969 Petroleum Decree which dismantled the existing revenue allocation system that had divided revenue from oil taxes equally between federal and state government, instead favouring an allocation formula in which the federal government controlled the dispensation of revenues to the states.
After the loss of 300,000 lives, the war concluded in 1970 and resulted in a victory for the Nigerian state, as the secessionist regions were subsequently brought back into the Nigerian fold. However, the former Eastern Region had been split into two new states,
RiversRivers State is one of the 36 states of Nigeria. Its capital is Port Harcourt. It is bounded on the South by the Atlantic Ocean, to the North by Imo, Abia and Anambra States, to the East by Akwa Ibom State and to the West by Bayelsa and Delta states...
and South-Eastern (now Cross River) in order to discourage lingering ideas of independence. Following the war, Delta peoples and their lands, with their vast petroleum reserves came to be seen by many in the Nigerian government as colonies of sorts. As a result these groups, notably the Igbo, have to an extent been marginalised in Nigerian politics since this time, whilst Nigeria's long line of military rulers have reaped immense profits from their land. Indeed, Nigeria has not had an Igbo head of state since the war's end.
Industry nationalisation (1970–1979)
In May 1971 the Nigerian federal government, then under the control of General
Yakubu GowonGeneral Yakubu "Jack" Dan-Yumma Gowon was the head of state of Nigeria from 1966 to 1975. He took power after one military coup d'etat and was overthrown in another...
, nationalised the oil industry by creating the Nigerian National Oil Corporation via a decree. Following the war with Biafra, the government felt it necessary to secure and gain more control over the oil industry. Nationalization of the oil sector was also precipitated by Nigeria's desire to join
OPECOPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
, which required that member states acquire 51% stake and become increasingly involved in the oil sector. Although the Nigerian government had maintained involvement in the industry prior to 1971, this was accomplished mainly through business deals on concessions of the foreign firms in operation. The creation of the NNOC made government participation in the industry legally binding. The federal government would continue to consolidate its oil involvement throughout the next several decades.
However, it was during the years of Gowon and his successors
Murtala MohammedGeneral Murtala Ramat Mohammed born was a military ruler of Nigeria from 1975 until his assassination in 1976.-Role during 1960s coups:...
and Olusegun Obasanjo known officially as the
Heads of the Federal Military Government of NigeriaThe President of Nigeria is the Head of State and head of the national executive. Officially styled President of the Federal Republic of Nigeria and Commander-in-Chief of the Nigerian Armed Forces. The current President of Nigeria is Goodluck Jonathan.-History:On October 1, 1960, Nigeria gained...
, who ruled amidst the
oil boomAn oil boom is a boom in the oil producing sector of an economy. Generally, this short period initially brings economical benefits, in term of increased GDP growth, but might later lead to a resource curse.-Consequences:...
of the 1970s that the
political economyPolitical economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
of petroleum in Nigeria truly became characterised by endemic
patronagePatronage is the support, encouragement, privilege, or financial aid that an organization or individual bestows to another. In the history of art, arts patronage refers to the support that kings or popes have provided to musicians, painters, and sculptors...
and corruption by the
political elitesElitism is the belief or attitude that some individuals, who form an elite — a select group of people with intellect, wealth, specialized training or experience, or other distinctive attributes — are those whose views on a matter are to be taken the most seriously or carry the most...
, which plagues the nation to this day. At both state and federal government levels, power and therefore wealth has typically been monopolised by select lobby groups who maintain a strong tendency to 'look after their own' by financially rewarding their political supporters. At the state or community level this means that interest groups in power will reward and protect their own; this is typically based on ethnic/tribal or religious affiliation of the interest group. The heavy patronage based on tribal affiliation has fuelled ethnic unrest and violence throughout Nigeria, but particularly in the
Niger DeltaThe Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil...
states, where the stakes for control of the immense oil resources are very high. At the federal level, political elites have utilised patronage to consolidate power for the ruling government, not only by rewarding their political friends in the federal government, but also by paying off major interest groups at the state or tribal level in order to elicit their cooperation. Inevitably these financial favours are distributed unequally and inefficiently, resulting in concentration of wealth and power in the hands of a small minority. Nigeria is in fact ranked by the
Corruption Perceptions IndexSince 1995, Transparency International publishes the Corruption Perceptions Index annually ranking countries "by their perceived levels of corruption, as determined by expert assessments and opinion surveys." The CPI generally defines corruption as "the misuse of public power for private...
121st, out of 180 countries total, and is now one of Sub Saharan Africa's least corrupt states.
Following the NNOC's genesis, the Nigerian government persisted in garnering control over oil revenues, in 1972 it declared that all property not currently owned by a foreign entity is legally the property of the government, which gained jurisdiction of the sale and allocation of concessions to foreign investment. The military regime oversaw the implementation of a number of other important milestones related to oil:
1974: Participation in oil industry by government increases to 55 percent.
1975: Decree 6 increases federal government share in oil sector to 80%, with only 20% going to states.
1976: First exploration and development venture by NNOC undertaken and drills to uncover commercial quantities of petroleum off-shore.
1978: Perhaps most importantly, the federal government created the Land Use Act which vested control over state lands in control of military governors appointed by the federal military regime, and eventually led to Section 40(3) of the 1979 constitution which declared all minerals, oil, natural gas, and natural resources found within the bounds of Nigeria to be legal property of the Nigerian federal government.
1979: In an effort to establish further control over the industry, the government merges and restructures the NNOC and the Ministry of Petroleum to form the
Nigerian National Petroleum CorporationThe Nigerian National Petroleum Corporation is the state oil corporation through which the federal government of Nigeria regulates and participates in the country's petroleum industry.-History:...
, an entity which would exert more power over the allocation and sale of concessions than the NNOC. By 1979, the NNPC had also gained 60 percent participation in the oil industry.
Attempted democracy and debt (1979–1983)
Despite the vast revenues accrued by Gowon and his heirs, the junta still managed to succumb to the demands of the civilian population, and in 1979 military head of state Olusegun Obasanjo handed over power to elected
National Party of NigeriaThe National Party of Nigeria was the dominant political party in Nigeria during the Second Republic .-Formation:The party's beginning could be traced to private and sometimes secret meetings among key Northern Nigerian leaders after the proscription of political parties in 1966 by the military...
(NPN) candidate
Shehu ShagariShehu Usman Aliyu Shagari, Turakin Sakkwato served as the President of Nigeria's Second Republic , after the handover of power by General Olusegun Obasanjo's military government....
. This event coincided with the declaration of Nigeria's Second Republic. At this juncture, the oil producing states of the Niger Delta were accounting for 82% of all federal government revenue but the population of these areas received very little compensation and demands for adequate reimbursement for the black gold extracted from their land could be heard at this time. Overall, petroleum accounted for 96% of all government external revenue but a mere 27% of the nation's GDP. However, the conversion to democracy would not improve the situation.
A 1982 Revenue Act implemented by the Shagari government would eventually be modified by yet another military regime in 1984 via Decree 36 which reduced government share of oil revenue from 80% to 55%. 32.5% go to states and 10% to local governments. The remaining 1.5% was earmarked as a special fund to develop oil producing areas, however, it was during the Shagari regime that corruption in Nigerian governance reached its zenith and capital flight out of Nigeria peaked, while the oil-producing peoples continued to receive little to no share of the oil profits Additionally, 1980 saw oil-generated revenues attain an all-time climax of US$ $24.9 billion but Nigeria still managed an international debt of $9 billion.
Shagari's NPN government was viewed by the majority of Nigerians as incorrigibly corrupt by the time the national elections of 1983 came about. Shagari and his subordinates steadily transformed Nigeria into a
police stateA police state is one in which the government exercises rigid and repressive controls over the social, economic and political life of the population...
where Nigerian military and police forces were permitted to utilise force quite liberally in order to control the civilian population. Such repressive measures were employed to ensure victory in the forthcoming elections, and this outcome was achieved largely through the bankrupting of the federal government's treasury.
Another disturbing trend had also been gaining steam in Nigeria since the early 1970s: a steep drop in
agricultural productionAgriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
correlating roughly with the rise in federal revenues from petroleum extraction. Whereas previously Nigeria had been the world's lead exporter of cocoa, production of this
cash cropIn agriculture, a cash crop is a crop which is grown for profit.The term is used to differentiate from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family...
dropped by 43%, while productivity in other important income generators like rubber (29%), groundnuts (64%), and cotton (65%) plummeted as well between 1972 and 1983. The decline in agricultural production was not limited to cash crops amid the oil boom, and national output of staple foodstuffs fell. This situation contrasts to Nigeria in 1960 just after independence, when despite British underdevelopment, the nation was more or less self-sufficient in terms of food supply, while crops made up 97% of all revenue from exports. The drop in production was so substantial that by the early 1980s the NPN government was forced to implement a now notorious import license scheme which essentially involved Nigeria, for the first time in its history, importing basic food items. However, as Nigerian activist and Nobel Laureate
Wole SoyinkaAkinwande Oluwole "Wole" Soyinka is a Nigerian writer, poet and playwright. He was awarded the 1986 Nobel Prize in Literature, where he was recognised as a man "who in a wide cultural perspective and with poetic overtones fashions the drama of existence", and became the first African in Africa and...
asserts, "the import license scam that was used by the party as a reward and enticement for party loyalists and would-be supporters cost the nation billions of dollars...while food production in the country virtually ceased".
Return to military rule and electoral abortion (1983–1993)
For these reasons, seizure of power by General
Muhammadu BuhariMuhammadu Buhari was a military ruler of Nigeria and an unsuccessful candidate for president in the 2003, 2007 and 2011 presidential elections...
a short time after the NPN government was fraudulently re-elected was initially perceived as a positive development by civilians. Buhari charged out of the gate in December 1983, declaring himself
Head of the Supreme Military Council of NigeriaThe President of Nigeria is the Head of State and head of the national executive. Officially styled President of the Federal Republic of Nigeria and Commander-in-Chief of the Nigerian Armed Forces. The current President of Nigeria is Goodluck Jonathan.-History:On October 1, 1960, Nigeria gained...
, he condemned the civilian government's blatant corruption and instituted programs supposedly designed to eliminate the disease of corruption. However, these measures were largely transparent and the looting of federal coffers by Nigeria's rulers continued largely unabated, "as Shagari's officers – both within party and government – left the country, came in and out as they pleased, while Burahi's tribunal sentence opposition figures to spells of between a hundred and three hundred years in prison for every dubious kind of crime". The Buhari government neglected to punish even Shagari himself, a consistent trend in Nigerian's long line of dictariorial rulers, who almost universally been spared any kind of justice.
In 1985, another general, this time General
Ibrahim BabangidaGeneral Ibrahim Badamasi Babangida CFR DSS mni , popularly known as IBB, was a Nigerian Army officer and military ruler of Nigeria...
, stole power and again alleged that his predecessors were corrupt violators of human rights and promised to rectify the situation, committing to a return to democracy by 1990. Nigeria had been saddled with a crushingly large international debt at this point. This was because, despite over 101 billion US dollars having been generated by the oil industry between 1958 and 1983, nearly all of these funds had been siphoned into the private bank accounts and the state sponsored pet projects maintained by the succession of Nigerian governmental elites.
Immediately prior to Babangida's rise to power, which is viewed by some as having been orchestrated by international oil and banking interests, the
International Monetary FundThe International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
was exerting increasingly acute pressure on the Nigerian government to repay its massive debts, of which 44% of all federal revenue was already servicing. Therefore, it was unsurprising when Babangida implemented the IMF's Structural Adjustment Program in October 1986 in order to facilitate debt repayment. The SAP was extremely controversial while it was in effect between 1986 and 1988. While it did permit Nigerian exports to become more competitive internationally and spurred a degree of economic growth, the SAP also incurred a dramatic drop in real wages for the majority of Nigerians. This, combined with major cuts to important public services, incited public unrest so extreme that Babangida's
Armed Forces Ruling CouncilThe President of Nigeria is the Head of State and head of the national executive. Officially styled President of the Federal Republic of Nigeria and Commander-in-Chief of the Nigerian Armed Forces. The current President of Nigeria is Goodluck Jonathan.-History:On October 1, 1960, Nigeria gained...
was obliged to partially reverse the SAP initiatives and return to inflationary economic policies. Babangida's rule also oversaw the annihilation of the Nigerian economic middle class, and Nigeria's entry to the Organisation of the Islamic Conference, despite Muslims accounting for less than 50% of the Nigerian populace.
The 1980s military juntas conducted several attempted re-organisations of the
NNPCThe Nigerian National Petroleum Corporation is the state oil corporation through which the federal government of Nigeria regulates and participates in the country's petroleum industry.-History:...
to increase its efficiency. However, according to most sources by the early 1990s the NNPC was characterised by chronic inefficiency and waste. Red tape and poor organisation are standard, with the NNPC being divided into several sub-entities, each fulfilling a particular function. This is despite the NNPC's growing participation in the industry, including development and exploration of numerous off-shore wells. As a result, the functionality of the industry is dependent on foreign corporations, not the NNPC.
The sudden jump in oil prices caused by the First Gulf War in 1990 and 1991, as most researchers confirm, was at best squandered. The Babangida junta has been widely accused of "mismanaging" the oil windfall from the Gulf War price jump, which accounted for about $12.5 billion in revenues. Another alleges that the federal government siphoned off about $12.2 billion between 1988 and 1994 into private accounts or expenditures, "clandestinely undertaken while the country was openly reeling with a crushing external debt".
Under these circumstances, Babangida eventually allowed for nationwide elections on 12 June 1993. These elections were declared universally free and fair (at least in comparison to past elections) by all major international election monitors, and the eventual winner of the presidential race was the Chief M.K.O. Abiola [of the newly formed SDP]. However, the military regime cynically pronounced the election, in which fourteen million Nigerians participated, to be null and void due to "
electoral irregularitiesElectoral fraud is illegal interference with the process of an election. Acts of fraud affect vote counts to bring about an election result, whether by increasing the vote share of the favored candidate, depressing the vote share of the rival candidates or both...
". The Nigerian people took to the streets in large numbers to protest the election's annulment. As civil unrest continued, Babangida was forced to cede power to the caretaker government of
Ernest ShonekanErnest Adegunle Oladeinde Shonekan is a British trained Nigerian lawyer, industrialist, politician and traditional chieftain. He was appointed as interim president of Nigeria by General Ibrahim Babangida on 26 August 1993. Babangida resigned under pressure to cede control to a democratic government...
.
An environment of crisis (1993–present)
Shonekan's interim government would be short-lived, as on date, Babangida's former
Chief of Army StaffThe Chief of Army Staff or Chief of Staff of the Army is the most senior officer in the command structure of many armies. The title comes from the fact that the officer is the chief army aide to the Commander-in-Chief, who is usually the head of state...
and Minister of Defence
Sani AbachaGeneral Sani Abacha was a Nigerian military leader and politician. A Kanuri from Borno by tribe, he was born and brought up in Kano, Nigeria. He was the de facto President of Nigeria from 1993 to 1998....
overthrew the caretaker regime and installed himself as Head of State. Popular opposition to the junta was widespread and public demonstrations were taking place on a regular basis. Immediately upon taking power, Abacha commenced the brutal repression of these subversive elements which would make his tenure notorious on a global basis.
Throughout the early 1990s such popular unrest grew steadily, particularly in the Niger Delta region, where various ethnic groups began demanding compensation for years of ecological damage as well as control over their land's oil resources. This unrest manifested itself at the outset as peaceful activist organisations that united their members on the basis of ethnicity.
One of the most prominent of these organisations to emerge in the region was the
Movement for the Survival of the Ogoni PeopleThe Movement for the Survival of the Ogoni People is a campaigning organization representing the Ogoni people. Ogoniland is situated north-east of Niger Delta...
(
MOSOP). The group declared that the
Ogoni peopleOgoni people are one of the many indigenous peoples in the region of southeast Nigeria. They share common oil related environmental problem with the Ijaw people of Niger Delta, but Ogonis are not listed in the list of people historically belonging to Niger Delta...
, a small minority in Rivers state of Nigeria, were slowly being annihilated as the arable terrain of their homeland (known as Ogoniland) was degraded by pollution from oil production by
ChevronChevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
and primarily
ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
.
Conflict in the
Niger DeltaThe Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil...
arose in the early 1990s due to tensions between the
foreignA multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
oil corporations, the Nigerian federal government, and a number of the Niger Delta's ethnic groups who felt they were being exploited, particularly minority groups like the
OgoniOgoni people are one of the many indigenous peoples in the region of southeast Nigeria. They share common oil related environmental problem with the Ijaw people of Niger Delta, but Ogonis are not listed in the list of people historically belonging to Niger Delta...
as well as the Ijaw in the late 1990s. Ethnic and political unrest has continued throughout the 1990s and persists as of 2006 despite the conversion to a more democratic, civilian federal system under the Obasanjo government in 1999; democracy has to some degree fan the flames as politicians seeking office may now employ militia groups to coerce voters and generally disrupt the election process. Competition for oil wealth has fuelled violence between innumerable ethnic groups, causing the militarisation of nearly the entire region by ethnic militia groups as well as
Nigerian militaryThe Nigerian Armed Forces are the Armed Forces of the Federal Republic of Nigeria. The military has active duty personnel in three armed services, totaling approximately 85,000 troops and 82,000 paramilitary personnel. Its origins lie in the elements of the Royal West African Frontier Force that...
and police forces (notably the
Nigerian Mobile PoliceThe Nigerian Mobile Police force is a paramilitary arm of the Nigeria Police Force and operate under orders from Nigeria's federal government.-Organization:...
). Victims of crimes are fearful of seeking justice for crimes committed against them because of growing "impunity from prosecution for individuals responsible for serious human rights abuses, [which] has created a devastating cycle of increasing conflict and violence". The regional and ethnic conflicts are so numerous that fully detailing each is impossible and impractical.
Joint Venture companies
All petroleum production and exploration is taken under the auspices of joint ventures between foreign multi-national corporations and the Nigerian federal government. This joint venture manifests itself as the
Nigerian National Petroleum CorporationThe Nigerian National Petroleum Corporation is the state oil corporation through which the federal government of Nigeria regulates and participates in the country's petroleum industry.-History:...
, a nationalised state corporation. All companies operating in Nigeria obey government operational rules and naming conventions (companies operating in Nigeria must legally be sub-entities of the main corporation, often incorporating "Nigeria" into its name). Joint ventures account for approximately 95 percent of all crude oil output, while local independent companies operating in marginal fields account for the remaining 5 percent. Additionally, the Nigerian constitution states that all minerals, oil, and gas legally belong to the federal government. Six companies are operating in Nigeria and are listed with their countries of origin (most of the following is extracted from a
Human Rights WatchHuman Rights Watch is an international non-governmental organization that conducts research and advocacy on human rights. Its headquarters are in New York City and it has offices in Berlin, Beirut, Brussels, Chicago, Geneva, Johannesburg, London, Los Angeles, Moscow, Paris, San Francisco, Tokyo,...
report):
Royal Dutch ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
(British/Dutch) :Shell Petroleum Development Company of Nigeria Limited (SPDC), usually known simply as
Shell NigeriaShell Nigeria is the colloquial name for Royal Dutch Shell's Nigerian operations carried out through four subsidiaries—primarily through Shell Petroleum Development Company of Nigeria Limited...
: A joint venture operated by
ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
accounts for fifty percent of Nigerian's total oil production (899000 oilbbl/d in 1997) from more than eighty oil fields. The joint venture is composed of NNPC (55%),
ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
(30%), TotalFinaElf (10%) and
AgipAgip is an Italian automotive gasoline and diesel retailer established in 1926. It is a subsidiary of the multinational petroleum company Eni.In 2003, Eni S.p.A...
(5%) and operates largely onshore on dry land or in the mangrove swamp in the
Niger DeltaThe Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil...
. "The company has more than 100 producing oil fields, and a network of more than 6,000 kilometres of pipelines, flowing through 87 flowstations. SPDC operates 2 coastal oil export terminals". The Shell joint venture produces about 50 percent of Nigeria's total crude. Shell Nigeria owns concessions on four companies, they are: Shell Petroleum Development Company (SPDC), Shell Nigeria Exploration and Production Company (SNEPCO), Shell Nigeria Gas (SNG), Shell Nigeria Oil Products (SNOP), as well as holding a major stake in Nigeria Liquified Natural Gas (NLNG). Shell formerly operated alongside British Petroleum as Shell-BP, but BP has since sold all of its Nigerian concessions. Most of Shell's operations in Nigeria are conducted through the Shell Petroleum Development Company (SPDC).
ChevronChevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
(American) :Chevron Nigeria Limited (CNL): A joint venture between NNPC (60%) and Chevron (40%) has in the past been the second largest producer (approximately 400000 oilbbl/d), with fields located in the Warri region west of the Niger river and offshore in shallow water. It is reported to aim to increase production to 600000 oilbbl/d.
Exxon-Mobil (American) :Mobil Producing Nigeria Unlimited (MPNU): A joint venture between the NNPC (60%) and Exxon-Mobil (40%) operates in shallow water off Akwa Ibom state in the southeastern delta and averaged production of 632000 oilbbl/d in 1997, making it the second largest producer, as against 543,000 pbd in 1996. Mobil also holds a 50% interest in a Production Sharing Contract for a deep water block further offshore, and is reported to plan to increase output to 900000 oilbbl/d by 2000. Oil industry sources indicate that Mobil is likely to overtake Shell as the largest producer in Nigeria within the next five years, if current trends continue, mainly due to its offshore base allowing it refuge from the strife Shell has experienced onshore. It is headquartered in Eket and operates in Nigeria under the subsidiary of Mobil Producing Nigeria (MPN).
AgipAgip is an Italian automotive gasoline and diesel retailer established in 1926. It is a subsidiary of the multinational petroleum company Eni.In 2003, Eni S.p.A...
(Italian) :Nigerian Agip Oil Company Limited (NAOC): A joint venture operated by Agip and owned by the NNPC (60%), Agip (20%) and
ConocoPhillipsConocoPhillips Company is an American multinational energy corporation with its headquarters located in the Energy Corridor district of Houston, Texas in the United States...
(20%) produces 150000 oilbbl/d mostly from small onshore fields.
TotalTotal S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
(French) :Total Petroleum Nigeria Limited (TPNL): A joint venture between NNPC (60%) and
ElfElf Aquitaine was a French oil company which merged with TotalFina to form TotalFinaElf. The new company changed its name to Total in 2003...
(now
TotalTotal S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
) produced approximately 125000 oilbbl/d during 1997, both on and offshore. Elf and Mobil are in dispute over operational control of an offshore field with a production capacity of 90000 oilbbl/d.
TexacoTexaco is the name of an American oil retail brand. Its flagship product is its fuel "Texaco with Techron". It also owns the Havoline motor oil brand....
(now merged with Chevron) :NNPC Texaco-Chevron Joint Venture (formerly Texaco Overseas Petroleum Company of Nigeria Unlimited): A joint venture operated by Texaco and owned by NNPC (60%), Texaco (20%) and Chevron (20%) currently produces about 60000 oilbbl/d from five offshore fields.
Impact of oil industry on the environment
The Niger Delta comprises 70,000 km² of wetlands formed primarily by
sedimentSediment is naturally occurring material that is broken down by processes of weathering and erosion, and is subsequently transported by the action of fluids such as wind, water, or ice, and/or by the force of gravity acting on the particle itself....
deposition. Home to 20 million people and 40 different ethnic groups, this floodplain makes up 7.5% of Nigeria's total land mass. It is the largest
wetlandA wetland is an area of land whose soil is saturated with water either permanently or seasonally. Wetlands are categorised by their characteristic vegetation, which is adapted to these unique soil conditions....
and maintains the third-largest drainage area in Africa. The Delta's environment can be broken down into four ecological zones:
coastal barrier islandsBarrier islands, a coastal landform and a type of barrier system, are relatively narrow strips of sand that parallel the mainland coast. They usually occur in chains, consisting of anything from a few islands to more than a dozen...
,
mangrove swamp forestsMangroves are various kinds of trees up to medium height and shrubs that grow in saline coastal sediment habitats in the tropics and subtropics – mainly between latitudes N and S...
, freshwater swamps, and lowland rainforests. This incredibly well-endowed
ecosystemAn ecosystem is a biological environment consisting of all the organisms living in a particular area, as well as all the nonliving , physical components of the environment with which the organisms interact, such as air, soil, water and sunlight....
, which contains one of the highest concentrations of
biodiversityBiodiversity is the degree of variation of life forms within a given ecosystem, biome, or an entire planet. Biodiversity is a measure of the health of ecosystems. Biodiversity is in part a function of climate. In terrestrial habitats, tropical regions are typically rich whereas polar regions...
on the planet, in addition to supporting the abundant
floraFlora is the plant life occurring in a particular region or time, generally the naturally occurring or indigenous—native plant life. The corresponding term for animals is fauna.-Etymology:...
and
faunaFauna or faunæ is all of the animal life of any particular region or time. The corresponding term for plants is flora.Zoologists and paleontologists use fauna to refer to a typical collection of animals found in a specific time or place, e.g. the "Sonoran Desert fauna" or the "Burgess shale fauna"...
, arable terrain that can sustain a wide variety of crops, economic trees, and more species of
freshwater fishFish are a paraphyletic group of organisms that consist of all gill-bearing aquatic vertebrate animals that lack limbs with digits. Included in this definition are the living hagfish, lampreys, and cartilaginous and bony fish, as well as various extinct related groups...
than any ecosystem in West Africa. The region could experience a loss of 40% of its inhabitable terrain in the next thirty years because of extensive dam construction in the region. The carelessness of the oil industry has also precipitated this situation, which can perhaps be best encapsulated by a 1983 report issued by the NNPC in 1983, long before popular unrest surfaced:
We witnessed the slow poisoning of the waters of this country and the destruction of vegetation and agricultural land by oil spills which occur during petroleum operations. But since the inception of the oil industry in Nigeria, more than twenty-five years ago, there has been no concerned and effective effort on the part of the government, let alone the oil operators, to control environmental problems associated with the industry.
Oil spills
Oil spills in Nigeria are a common occurrence; it has been estimated that between 9 million to 13 million barrels have been spilled since oil drilling started in 1958. The government estimates that about 7,000 spills occurred between 1970 and 2000. Causes include corrosion of
pipelinesPipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
and tankers (accounts for 50% of all spills), sabotage (28%), and oil production operations (21%), with 1% of the spills being accounted for by inadequate or non-functional production equipment. A reason that
corrosionCorrosion is the disintegration of an engineered material into its constituent atoms due to chemical reactions with its surroundings. In the most common use of the word, this means electrochemical oxidation of metals in reaction with an oxidant such as oxygen...
accounts for such a high percentage of all spills is that as a result of the small size of the oilfields in the
Niger DeltaThe Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil...
, there is an extensive network of pipelines between the fields. Many facilities and pipelines have been constructed to older standards, poorly maintained and outlived their estimated life span. Sabotage is performed primarily through what is known as "bunkering", whereby the saboteur taps a pipeline, and in the process of extraction sometimes the pipeline is damaged. Oil extracted in this manner can often be sold for cash compensation.
Oil spillage has a major impact on the ecosystem. Large tracts of the mangrove forests, which are especially susceptible to oil (this is mainly because it is stored in the
soilSoil is a natural body consisting of layers of mineral constituents of variable thicknesses, which differ from the parent materials in their morphological, physical, chemical, and mineralogical characteristics...
and re-released annually with inundation), have been destroyed. An estimated 5–10% of Nigerian mangrove ecosystems have been wiped out either by settlement or oil. Spills take out crops and
aquacultureAquaculture, also known as aquafarming, is the farming of aquatic organisms such as fish, crustaceans, molluscs and aquatic plants. Aquaculture involves cultivating freshwater and saltwater populations under controlled conditions, and can be contrasted with commercial fishing, which is the...
s through contamination of the
groundwaterGroundwater is water located beneath the ground surface in soil pore spaces and in the fractures of rock formations. A unit of rock or an unconsolidated deposit is called an aquifer when it can yield a usable quantity of water. The depth at which soil pore spaces or fractures and voids in rock...
and soils.
Drinking waterDrinking water or potable water is water pure enough to be consumed or used with low risk of immediate or long term harm. In most developed countries, the water supplied to households, commerce and industry is all of drinking water standard, even though only a very small proportion is actually...
is also frequently contaminated, and a sheen of oil is visible in many localised bodies of water. If the drinking water is contaminated, even if no immediate health effects are apparent, the numerous hydrocarbons and chemicals present in oil represent a carcinogenic risk. Offshore spills, which are usually much greater in scale, contaminate coastal environments and cause a decline in local fishing production.
Nigerian regulations are weak and rarely enforced allowing oil companies, in essence, to self-regulate.
Natural gas flaring
- See also main article: Environmental issues in the Niger Delta
Nigeria flares more natural gas associated with oil extraction than any other country, with estimates suggesting that of the 3.5 Gcuft of associated gas (AG) produced annually, 2.5 Gcuft, or about 70% is wasted via flaring. Statistical data associated with gas flaring is notoriously unreliable, but AG wasted during flaring is estimated to cost Nigeria US $2.5 billion on a yearly basis. Companies operating in Nigeria harvest natural gas for commercial purposes, however prefer to extract it gas from deposits where it is found in isolation as non-associated gas. It is costly to separate commercially viable associated gas from oil, hence gas flaring to increase crude production.
Gas flaring is discouraged by the international community as it contributes to
climate changeClimate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
. In fact, in western Europe 99% of associated gas is used or re-injected into the ground. Gas flaring in Nigeria releases large amounts
methaneMethane is a chemical compound with the chemical formula . It is the simplest alkane, the principal component of natural gas, and probably the most abundant organic compound on earth. The relative abundance of methane makes it an attractive fuel...
, which has very high
global warmingGlobal warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...
potential. The methane is accompanied by
carbon dioxideCarbon dioxide is a naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom...
, of which Nigeria is estimated to have emitted more than 34.38million tons in 2002, accounting for about 50% of all industrial emissions in the country and 30% of the total CO
2 emissions. As flaring in the west has been minimised, in Nigeria it has grown proportionally with oil production. While the international community, the Nigerian government, and the oil corporations seem to agree that gas flaring need to be curtailed, efforts to do so have been slow and largely ineffective.
Gas flares release a variety of potenially poisonous chemicals such as
nitrogen dioxideNitrogen dioxide is the chemical compound with the formula it is one of several nitrogen oxides. is an intermediate in the industrial synthesis of nitric acid, millions of tons of which are produced each year. This reddish-brown toxic gas has a characteristic sharp, biting odor and is a prominent...
s, sulphur dioxide, volatile organic compounds like
benzeneBenzene is an organic chemical compound. It is composed of 6 carbon atoms in a ring, with 1 hydrogen atom attached to each carbon atom, with the molecular formula C6H6....
,
tolueneToluene, formerly known as toluol, is a clear, water-insoluble liquid with the typical smell of paint thinners. It is a mono-substituted benzene derivative, i.e., one in which a single hydrogen atom from the benzene molecule has been replaced by a univalent group, in this case CH3.It is an aromatic...
,
xyleneXylene encompasses three isomers of dimethylbenzene. The isomers are distinguished by the designations ortho- , meta- , and para- , which specify to which carbon atoms the two methyl groups are attached...
and
hydrogen sulfideHydrogen sulfide is the chemical compound with the formula . It is a colorless, very poisonous, flammable gas with the characteristic foul odor of expired eggs perceptible at concentrations as low as 0.00047 parts per million...
, as well as carcinogens like benzapyrene and dioxin.
Often gas flares are often close to local communities, and lack adequate fencing or protection for villagers who may risk nearing the heat of the flare in order to carry out their daily activities.
Flares which are often older and inefficient are rarely relocated away from villages, and are known to coat the land and communities in the area with
sootSoot is a general term that refers to impure carbon particles resulting from the incomplete combustion of a hydrocarbon. It is more properly restricted to the product of the gas-phase combustion process but is commonly extended to include the residual pyrolyzed fuel particles such as cenospheres,...
and damage adjacent vegetation.
In November 2005 a judgment by, "the Federal High Court of Nigeria ordered that gas flaring must stop in a Niger Delta community as it violates guaranteed constitutional rights to life and dignity. In a case brought against the Shell Petroleum Development Company of Nigeria (Shell), Justice C. V. Nwokorie ruled in Benin City that the damaging and wasteful practice of flaring cannot lawfully continue."
Repression of protest and government corruption
One of the greatest threats facing the people of the Niger River Delta has actually been their own government. The Nigerian government has total control over property rights and they have the authority to seize any property for use by the oil companies. A majority of every dollar that comes out of the ground in the delta goes to the government of Nigeria. As a result of the enormous amounts of sweet light crude that comes out of the delta every day Nigeria has the second largest GDP in Sub-Saharan Africa Despite the wealth flowing into the nation from oil revenues many of Nigeria’s socio-economic factors are worse now than they were 30 years ago
According to the
World BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, most of Nigeria’s oil wealth gets siphoned off by 1% of the population. Corruption in the government is rampant, in fact since 1960 it is estimated that 300 to 400 billion dollars has been stolen by corrupt government officials. The corruption is found at the highest levels as well. For example a former inspector general of the national police was accused of stealing 52 million dollars. He was sentenced to six years in prison for a lesser charge.
Nigerians have on many occasions engaged in protests against oil-related corruption and environmental concerns, but are frequently met with harsh suppression by government forces. One example of this occurred in February 2005. There was a protest at Chevrons Escravos oil terminal in which soldiers opened fire on the protestors. One man was killed and 30 others were injured. The soldiers claim that the protestors were armed, a claim the protestors deny. Another, more extreme example happened in 1994. The Nigerian military moved into a region called Ogoniland in force. They razed 30 villages, arrested hundreds of protestors, and killed an estimated 2,000 people.
One of the protestors they arrested was a man named
Ken Saro-WiwaKenule "Ken" Beeson Saro Wiwa was a Nigerian author, television producer, environmental activist, and winner of the Right Livelihood Award and the Goldman Environmental Prize...
.
Ken Saro-WiwaKenule "Ken" Beeson Saro Wiwa was a Nigerian author, television producer, environmental activist, and winner of the Right Livelihood Award and the Goldman Environmental Prize...
was a Nigerian TV producer, writer and social activist. In 1990 he founded the Movement for the Survival of the Ogoni People (MOSOP). Ken wrote and spoke out about the rampant corruption in the Nigerian government and he condemned
ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
and British Petroleum. He was arrested by the Nigerian Government and imprisoned for 17 months. Then in a show trial Ken and eight others were condemned to death. He and the others were hung in 1995 and he was buried in an unmarked common grave.
Poverty and chronic underdevelopment
The people of the delta states live in extreme poverty even in the face of great material wealth found in the waters by their homes. According to
Amnesty InternationalAmnesty International is an international non-governmental organisation whose stated mission is "to conduct research and generate action to prevent and end grave abuses of human rights, and to demand justice for those whose rights have been violated."Following a publication of Peter Benenson's...
70% of the six million people in the Niger River Delta live off of less than 1$ US per day. For many people this means finding work in a labour market, which is in many instances hostile to them. Much of the labour in the past has been imported. To a growing degree the labour force for the oil companies is more and more coming from Nigeria. But discrimination is rampant and for the most part locals are discriminated against. This leads to a situation where the men in the community have to search for temporary employment. This has two negative effects on the community. First it takes the men out of the community as they go in search of work. The second is the nature of temporary employment sets up unsustainable spending habits). They earn some money and spend it thinking it will be easy to earn more, when in many cases this does not turn out to be the case.
As the government officials siphon off all the money generated from oil sales the infrastructure suffers. Most of the villages do not have electricity or even running water). They do not have good access to schools or medical clinics. For many, even clean drinking water is difficult to come by. The deterioration of the infrastructure in the delta states is so severe it is even a problem in the more urban areas. One example of this is the airport at Port Harcourt. Part of a fence was not properly maintained and an Air France flight hit a herd of cattle on the runway. The airport was closed and is still not open.
The leadership of the Niger Delta region are responsible for most of the underdevelopment in the region. There is large scale corruption amongst the elected leaders especially governors and the leaders have helped sponsor the militants groups kidnapping innocent people and sabotaging efforts by the federal government for any infrastructure development. Indicted corrupt leaders are also cheered by the Niger Delta people.
External links
- International Museum of Women feature on Nigerian Women's Activism Against Exploitation
- John Ghazvinian's "The Curse of Oil" in the Virginia Quarterly Review
- Nigeria Oil Gas Online
- The Niger Delta Petroleum System: Niger Delta Province, Nigeria, Cameroon, and Equatorial Guinea, Africa, United States Geological Survey
The United States Geological Survey is a scientific agency of the United States government. The scientists of the USGS study the landscape of the United States, its natural resources, and the natural hazards that threaten it. The organization has four major science disciplines, concerning biology,...
- TIME article on the background to the 2006 increase in militant activity
- Remember Saro-Wiwa
- Amnesty International's latest report on oil and injustice in Nigeria
- Blood Oil: report on the Movement for the Emancipation of the Niger Delta by Sebastian Juger for Vanity Fair, Feb 2007
- Nigerian Oil – "Curse of the Black Gold: Hope and Betrayal in the Niger Delta" – article from National Geographic Magazine
National Geographic, formerly the National Geographic Magazine, is the official journal of the National Geographic Society. It published its first issue in 1888, just nine months after the Society itself was founded...
(February 2007)