Nigeria's oil industry

From SourceWatch
Jump to navigation Jump to search
"If U.S. troops go to Africa," G. Pascal Zachary, wrote March 14, 2006, in AlterNet, "it won't be for a humanitarian intervention; it will be to protect American oil interests in the troubled Niger Delta."

Nigeria's oil industry is nearly synonymous with violence, as kidnappings and conflict continuously disrupt operations.

"Oilmen looking for an alternative to the politically troubled oil fields of the Middle East think they see one beneath the waters off West Africa. The bad news is that the arc of nations stretching along the shore of the Gulf of Guinea from the Ivory Coast to Angola looks as politically testing as Arabian ones," Paul Maidment wrote March 10, 2003, in Forbes.

"With estimated reserves of 24 billion barrels, the Gulf of Guinea is likely to become the world's leading deepwater offshore production center. Its fields contain good-quality low-sulfur crude. They are directly across the Atlantic from refineries on America's East Coast (Africa lacks much refining capacity of its own outside Nigeria and South Africa). It is open sea--no maritime choke points to navigate," Maidment wrote.

"Being offshore isolates the fields from the vagaries of Africa's civil and border wars, coups, rebellions and revolutions. Islam is well entrenched, but it is not the dominant faith of the coastal nations. Nor is there evidence that Al-Qaeda has got a foothold in the region, as it has on the eastern side of the continent--though it may have had contacts with local fundamentalist groups in Islamic northern Nigeria," Maidment wrote.


Nigeria's oil was discovered in 1956, which "transformed Nigeria’s economy." For the next two decades, oil "provided approximately 90 percent of foreign exchange earnings, and 80 percent of federal revenue. Nigeria also has huge reserves of natural gas, yet to be fully exploited." [1]

As of September 2004, Nigeria was "the largest oil producer in the Sub-Saharan Africa, the fifth largest petroleum exporting country in the organization of petroleum exporting countries (OPEC), and the fifth largest oil exporting country to the United States, amounting to about 8% of US crude oil imports. Nigeria produces 30% of the total oil production in the African region. Oil revenues have historically provided about 95% of Nigeria’s foreign exchange earnings and about 85% of federal revenue.

"The source of Nigeria’s wealth is the Niger Delta, a wetland of about 70,000 sq. km. spread over a number of ecological zones along the Gulf of Guinea. The Niger Delta is made up of nine oil producing States and has an estimated population of about 20 million people, amounting to about 16.7% of the Nigerian population (120 million)." [2]

Source of Civil Unrest

"The oil industry is central to the ongoing civil unrest in the country. The equitable sharing of the country’s multi-billion anual oil revenues amongst its population is at stake. The Nigerian population are particularly poor and do not understand why they are so deprived of the benefits of a natural resource, which they often see as a gift of God. Oil companies are faced with increasing protests directed at oil activities and the lack of development in the delta. These have included incidents of hostage-taking, closures of flow-stations, sabotage, and intimidation of staff." [3]

Oil Companies in Nigeria

"In 1971, Nigeria joined the OPEC and, in line with OPEC resolutions, the Nigerian National Oil Corporation (NNOC) was established, later becoming Nigerian National Petroleum Corporation (NNPC), in 1977." [4]

The NNPC dominates Nigeria's oil industry and is "the major partner in the upstream joint ventures with the 'seven sisters' or major multinational petroleum exploration and production companies. These are the largest and oldest in Nigeria – Shell Petroleum Development company – SPDC or better known as 'Shell' others are: Mobil Producing Nigeria unlimited, Chevron Nigeria, Elf Petroleum Nigeria and the Nigerian Agip Oil company, NAOC & Affiliate, Agip Energy and Natural Resources, AENR." [5]

Nigerian Oil Companies

International Oil Companies

"There are eighteen international oil companies operating in the country. Some of them are new entrants who have an interest in the deep offshore blocks in partnership with other operators. The oil majors account for about 99% of crude oil production in Nigeria. The international oil companies operating in Nigeria and when they established are:" --Nigerian Investment Promotion Commission.

  • Shell Petroleum Development Company Limited (since 1937)
  • Mobil Producing Nigeria Unlimited (since 1955)
  • Chevron Nigeria Limited (since 1961)
  • Texaco Overseas Nigeria Petroleum Company Unlimited (since 1961)
  • Elf Petroleum Nigeria Limited (since 1962)
  • Philip (since 1964); Pan Ocean Oil Corporation (since 1972); Bought over Ashland Oil Nigeria Limited (1973)
  • Agip Energy & Natural Resources (since 1979)
  • Statoil/BP Alliance (since 1992)
  • Esso Exploration & Production Nigeria Limited (since 1992)
  • Texaco Outer Shelf Nigeria Limited (since 1992)
  • Shell Nigeria Exploration & Production Company (since 1992)
  • Total (Nigeria) Exploration & Production Company Ltd. (since 1992)
  • Amoco Corporation (since 1992)
  • Chevron Exploration & Production Company (since 1992)
  • Conoco (since 1992)
  • Abacan (since 1992)


  • "Nigeria: The Political Economy of Oil" by Sarah Ahmad Khan, Research Fellow, Oxford Institute for Energy Studies, Oxford University Press, September 1994 (hardcover), ISBN 0197300146.

Related SourceWatch Resources

External links

General Information


Articles & Commentary