CRUDE OIL IN NIGERIA; A COIN OF TWO OPPOSING SIDES

INTRODUCTION

Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after a half century of exploration by Shell-BP  the sole concessionaire at the time. Thus, Nigeria joined the rank of the sole producers of oil in 1958 when its first oil field came on stream producing 5,100 bpd. In that order, Nigeria united with the Organization of Petroleum Exporting Countries (OPEC) in 1971 and established the Nigerian National Petroleum Company (NNPC) in 1977, a state owned and controlled company, which is a major player in both the upstream and downstream sectors (Wikipedia).

And from the early 70s, the petroleum industry became a dominant industry in the economy, coming after the Agricultural sector, which was the country's mainstay before the discovery of crude oil. Evidently, the importance of crude oil indeed has manifested in the nations economy: It dictated the pace of the economic, political, social and cultural progress of the country.

IMPACTS OF CRUDE OIL IN NIGERIAy

This discovery of oil has systematically submerged agricultural sector which used to provide the bulk of our revenue. This sector has been neglected for oil sector. Today the oil sector contributes about 86 percent of the federal government revenue, accounts for about 90 percent of the country's foreign exchange earnings and constitute over 25 percent of the nations Gross Domestic Products. Also the previous impact of the good work of the petroleum trust fund (PTF) cannot be over emphasized.

Structurally and otherwise, the oil boom of the 1970s helped significantly in transforming Nigeria from an ordinary third world black country to an appreciate position both in term of development, infrastructure, international politics et cetera. It is the first and only producer in West Africa and the second most producer in West Africa, it is only to Libya. Among the major world producers with an output of 110 million tons in 1974. It was placed sixth. Because of its limited internal market, it exports largest proportion of its output. To facilitate exportation, pipelines have been laid to connect the major oil wells with the ports of Bonny and Escravos. Today, urban and rural development in parts of the country can be traced to the oil wells located in the remote villages of the country where oil continues to gush out day and night.

It is the oil of these villages that has brought sky crappers, express roads, development of federal capital territory (FCT) fly over and other physical structures to cities and towns, which are from gushing wells.

But the villagers from whose ancestral land and territorial waters the black gold oil is mined, there is a sad tale full of sound signifying something neglect.

Furthermore, with the over growing contribution to Gross Domestic product, one should not consider it as an over statement by saying that the Nigerian economy is highly dependent on the oil sector for its economic activities and hence concluded that crude oil is now the mainstay or power of the Nigeria economy. Now as a result crude oil being the mainstay or power of the Nigerian economy it have influence its expenditure profit outlined by the president in the proposal of its budgeting which #841 billion is for recurrent expenditure while #540 billion would go for capital projects.

NEGATIVE EFFECTS OF CRUDE OIL IN NIGERIA

Nigeria has intense environmental degradation due to various discharges in the various state of matter that is solid, liquid and gaseous states. Each various states have contributed to degrading land, water bodies and the atmosphere at large. In 1995  cases of pollution of well water and streams with petroleum effluent have been reverted around the Kaduna refinery.

 One of the major environmental problems in Nigeria since the inception of oil exploration, exploitation, processing and transportation by the multinational oil companies has been that of oil spillage. Oil spills in the Niger Delta Region has caused a diverse depletion of environmental assets, values and worths and has also caused hardship and poverty among the host communities. According to the Department of Petroleum Resources (DPR) of the Federal Ministry of Petroleum in Nigeria, the Niger Delta is one of the worlds largest Wetlands and the largest in Africa. It encompasses four main flourish and rich ecological zones; they are coastal barrier Islands, mangroves, fresh water swamp forest and lowland rainforests. This area in particular has been greatly impacted by oil spillage. The NNPC in its annual report, places the quantity of oil jettisoned into the Niger Delta environment yearly at two thousand, three hundred (2,300) cubic meters with an average of three hundred (300) individual spills annually. In another report, it states that the total amount of oil in barrels spilled between 1960 and 1997 is upwards of one hundred million barrels (Green Peach Oil Briefing, 1993).

Oil Spillage has a major impact on the ecosystem into which it is released. It destroys the mangrove forests which are especially susceptible to oil; this is mainly because it stores up oil in the soil and re-releases it annually with inundation. It is estimated that about five to ten percent (5-10%) of the mangrove in the Niger Delta Region has been opportunities for leaks. In onshore areas, most pipelines and flow lines are laid above the ground and are more than twenty-four years old (source). Even one of the oil company in the region, Shell, admits that most of the facilities has fifteen years estimated life span.

Basically, the problem that gives vent to this study is on the negative effects of oil in Nigeria. The ascendancy of oil to the prime position in Nigeria and the neglect of all other non-oil sector gave Nigeria a mono-cultural economy or a one legged economy. Despite being the 8th largest producer of crude oil, what we have in the country to show the world is unprecedented level of unemployment. Nigeria today is one of the poorest countries of the world as measured by the United Nations Development Programme (UNDP).

Another monster created by the unwanted mismanagement of this resource is crude oil theft. This came into force barely five years ago. Youths in Niger Delta region who are already used to free money devised a way of affecting a hole in the crude pipelines thereby siphoning crude oil and selling them at a giveaway price to international rogues.

In addition to the above, the problem of youth restiveness, agitations and violence in the affected communities which has forced migration of inhabitants is also a problem that needs resolutions. Despite the environmental effects on crude oil spill, its effects on human health on the impacted victims as a result of consumption of contaminated crops and aquatic organisms is also an endemic condition in this area. 

CONCLUSION

In general development, there is nothing short of truism that there have rapid changes in the spheres of economic and social life of Nigeria due to the emergence of oil in national lives. If the country can diversify out of oil completely, since it breeds corruption, the negative effect of it would be minimized and if the positive aspect is capitalized on, Nigeria can be in no distant time, become a developed country.