Crude Oil Crisis in Nigeria

Nigeria is the 12th largest producer of crude in the world and the 8th largest exporter, and has the 10th largest proven reserves. Nigeria – Butmen Corporation (a German company) was the first company to explore crude oil in Nigeria as far back as 1908 when traces of it was found at Araromi in the present Ondo state. This pioneering exploration was brief due to the World War 1 (1914 – 1918). But, in 1937 Shell  started exploratory activities after been  awarded the sole concession rights that covered the whole territory of Nigeria. The company operated under the Mineral Oil ordinance of No. 17 of 1914 and its amendments of 1925 and 1950 which stipulated that only companies registered in Britain or any of its protectorate with their principal officers being British, can explore oil in Nigeria.

Shell intensified its geographical surveys in the late 1940s till 1950s and then discovered its first commercial crude oil in 1956 at Oloibiri in the present Bayelsa State. On 1958, Shell started oil exportation from Oloibiri field at a rate of 5,100 barrels per day (bpd). In other to break shell's monopoly on oil exploration its concession right was reviewed and exploration rights were granted to other companies like Mobil, ELF, Agip, Gulf and Tenneco. By the time of Independence in 1960, oil production had been established and export was over 170,000 bpd.
All these oil production is from a small fragment of the nation amounting to about 7.5% of Nigeria's land mass and known as the Niger Delta. The Niger Delta consists of the present day Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers state with a population of about 31 million people (less than 20% of the nation's population).




1. Abia 2. Akwa Ibom 3. Bayelsa 4.Cross River 5. Delta 6. Edo 7. Imo 8. Ondo and 9. Rivers

Nigeria is currently the biggest oil producer in Africa with about two million bpd, all generated from the Niger Delta. Though oil exports account for more than 80% of our total export earnings, 85% percernt of this oil wealth is retained by a few comprising 1% of the national population. The pattern of the oil revenue allocation has been a major cause of agitation by the Niger Deltans who claim that the returns of their resource is used to develop the North. They claim that their lands are being snatched from them forcefully without compensation and their source of livelihood (fishing) is been destroyed by recurrent oil spillage. There has been about 7000 oil spills between 1970 and 2000, more than one each day. Also, more than 90% of the natural gas extracted in the oil wells are flared causing more environmental damage.
In a bid to protect their rights and seek justice, many groups both militant and non-militant has emerged in the Niger Delta with most active ones being the militant ones especially Movement for the Emancipation of the Niger Delta (MEND) and Niger Delta People's Volunteer Force (NDPVF). The militant groups are demanding for creation of additional states, amenities and jobs, contracts and oil concessions for faction leaders. And since 2005 they have been destroying oil production infrastructure of different oil companies, kidnapping oil workers for ransom and causing oil production shutdowns of up to 800,000 bpd, threatening the government's plan to increase production to four million bpd by 2010. Only some of those production losses have been offset by recent offshore developments.
Also on several occasion, the Nigerian government has deployed armed forces with heavy equipment to crush the militants, but they only seem to succeed in leveling communities. In 1995 it hung environmentalist and famous writer, Ken Saro-Wiwa and eight others from Ogoni for challenging the exploration of oil by Shell on Ogoni soil. In December 1998, the government massacred youths in Yenegoa, the capital of Bayelsa state, for demanding the control of the oil resources exploited on their ancestral lands. A few months later, it also sent troops to flatten Kaiama, a town in Bayelsa state where youths had weeks before made a declaration demanding the people's control of their oil resources. In November1999, the town of Odi, Bayelsa state in Niger Delta was burnt down by soldiers on the orders of the then President, Olusegun Obasanjo. Several hundred people, including women and children were killed in the streets as they tried to escape from their burning houses. Restive youths, protesting the neglect of the community after four decades of oil exploration in the area had murdered twelve policemen sent to restore order in the town the previous week. Obasanjo, rather than send special forces, dispatched troops commanded by an army colonel, who with a full complement of artillery, bombarded Odi, murdered hundreds, and subsequently torched down the town.
The damage crude oil has done in the Niger Delta is enormous, while the local indeginous people there have seen little if any improvement in their standard of living and still suffer the damage to their natural environment and source of livelihood. Nigeria, who at one time was the world's largest exporter of groundnuts, cocoa, and palm oil, and  a significant producer of coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane has been experiencing a decline in agricultural exports since the exportation of crude oil.
That Nigeria is blessed with abundant natural resources and yet her people remain poor is regarded as resource curse. Looking at all these, one can easily conclude in his heart that maybe Nigeria would have been well off without crude oil.

References
International Crisis Group. "Fuelling the Niger Delta Crisis". http://www.crisisgroup.org/home/index.cfm?id=4394 Retrieved October, 2009.
Wikipedia. "Nigeria". http://en.wikipedia.org/wiki/Nigeria Retrieved June, 2009
Wikipedia. "Niger Delta". http://en.wikipedia.org/wiki/Niger_Delta Retrieved October, 2009
Ransome-Kuti, Beko: "The Niger Delta crisis and Nigeria's future" http://www.humanrights.de/doc-en/countries/nigeria/background/niger_delta_crisis.html Retrieved October, 2009
Centre for Democracy and Development(CDD). "The lingering crisis in Nigeria's Niger Delta and suggestions for a peaceful resolution"  http://cdd.org.uk/resources/workingpapers/niger__delta_eng.htm. Retrieved October, 2009

2 Responses to Crude Oil Crisis in Nigeria

  1. Ghana should learn lessons from Nigeria's oil and make sure that the revenue generated from oil is used for the development of the nation. Besides,the government of Ghana should insist that companies that explore oil in a particular community should fulfill their social responsibilities in communities.

  2. OBANLEARO OMOTOYOSI says:

    NIGERIA MAY BE KNOWN FOR THE OIL PRODUCTION AND ALSO BEEN THE LARGEST OIL PRODUCER IN NIGERIA BUT NOW THEY ARE EXPERIENCING RIOT.... OIL PRODUCTION IS INDEED A GREAT SOURCE OF REVENUE BUT ALSO IT INCREASES THE CORRUPTION OF THE LEADER AND THE FACT IS THAT THE OIL IS NOT FOREVER

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