Nigeria is the largest oil and gas producer in Africa. Crude oil from the Niger Delta basin mostly comes in two types: light, and comparatively heavy – the lighter crude has API gravity of approximately 36 while the heavier crude has API gravity range 20–25. Both types are paraffinic and low in sulfur. Nigeria's economy and budget have been largely supported from income and revenues generated from the petroleum industry since 1960. Statistics as at February 2021 show that the Nigerian oil sector contributes to about 9% of the GDP of the nation. The need for holistic reforms in the petroleum industry, ease of doing business, encouragement of local content in the industry birthed the Petroleum Industry Bill, introduced by the Goodluck Jonathan administration on 18 July 2008.
History of oil exploration The history of oil exploration in Nigeria goes back to 1903, when the Nigerian Bitumen Corporation conducted exploratory work in the country. At the onset of World War I, the firm's operations were stopped. Due to lack of technological and financial resources of small oil companies, large and strong other oil companies took over the exploration of commercial oil in the country. Thereafter, licenses were given to D'Arcy Exploration Company and Whitehall Petroleum, but neither company found oil of commercial value and they returned their licenses in 1923. A new license covering 920,000 square kilometres (357,000 square miles) was given to Shell D'arcy Petroleum Development Company of Nigeria, a consortium of Shell and BP (then known as Anglo-Iranian). The company began exploratory work in 1937. The association was granted license to explore oil all over the territory of Nigeria but, the acreage allotted to the company in the original license was reduced in 1951 and then, between 1955 and 1957. Drilling activities started in 1951 with the first test well drilled in Owerri area. Oil was discovered in non-commercial quantities at Akata, near Eket in 1953. Prior to the Akata find, the company had spent around £6 million on exploratory activities in the country. In the pursuit of commercially available petroleum, Shell-BP found oil in Oloibiri, Nigeria, in 1956. Other important oil wells discovered during the period were Afam and Bomu in Ogoni territory. Production of crude oil began in 1957, and in 1960, a total of 847,000 tonnes of crude oil was exported. Towards the end of the 1950s, non-British firms were granted license to explore for oil: Mobil in 1955, Tenneco in 1960, Gulf Oil, later Chevron in 1961, Agip in 1962, and Elf in 1962. Prior to the discovery of oil, Nigeria (like many other African countries) strongly relied on agricultural exports to supply its economy. However, after nearly 50 years searching for oil in the country, Shell-BP discovered oil at Oloibiri in the Niger Delta. The first oil field began production in 1958. After that, the economy of Nigeria might have been expected to experience strong growth. However, competition for the profits from oil, coupled with the government keeping almost all of the profits for themselves, left little economic benefit for the people. In one interview with locals who were young at the time of oil discover, the blame was placed largely on the government and the greed of bureaucrats:
"I don't only blame the whites that came here, what about the government? People in the government get nearly all the money from the economy." Many citizens of Nigeria believe that they have not been able to experience the economic benefits derived from oil extraction in Nigeria. In large part due to Nigerian government officials remaining majority shareholders in the profits created by the production of Nigerian oil, leading to government capturing of nearly all oil production, and citizens not seeing socio-economic benefits. The president of Nigeria as of 2023, Bola Tinubu, has taken steps to privatize the oil and gas industry in Nigeria. Decades of government ownership and control of the industry left the people at large impoverished and unable to experience any of the economic gain related to oil and gas exploration and extraction, Tinubu hopes that privatization and free markets will allow for greater equity in the space that has been rife with corruption since the 1950s in Nigeria when petroleum products were first discovered.
Production and exploration
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