The two begun production in … They were accused of killing other environmentalists in the region. The search for crude oil was spearheaded by the Nigerian Bitumen Company, a private entity led by an American engineer, John Simon Bergheim. Pan Ocean Corporation drilled its first discovery well at Ogharefe – I, 1974 | Second Participation Agreement, Federal Government increases equity to 55% and Elf formally changed its name from “Safrap.” Ashland’s first oil discovery at Ossu –I, 1975 | Agip carried out its first Oil lifting from Brass Terminal and the DPR was upgraded to the Ministry of Petroleum Resources, 1976 | MPE renamed Ministry of Petroleum Resources (MPR) and Pan Ocean commenced production via Shell-BP’s pipeline at a rate of 10,800 b/d. Other countries that buy Nigeria’s oil include UK, Germany and China. According to USA TODAY, a total of 1,082 deaths were attributed to the disaster.Â. Nigeria joined the oil producers in 1958 when its first oilfield came on stream at 5,100 b/d. They negotiated major concessions, including new schools, health clinics, electricity and water systems for the area around Escravos, Nigeria.Â. Slaves formerly had been traded for European goods, especially guns and gunpowder, but now the British encouraged trade in palm oil in the Niger delta states, ostensibly to replace the trade in slaves. As much as 10 percent of the country's mangrove forests have disappeared due to oil pollution and growing areas of farmland are proving uninhabitable.Â, Many groups have organized against the management of Nigeria's oil. Nigerian militants regularly kidnap foreign oil workers either to demand control of oil revenues or increase jobs and improve working conditions.Â, Others practice nonviolence through protesting and activism, which have been successful. The history of oil exploration in Nigeria dates back to 1903 when Nigerian Bitumen Corporation conducted exploratory work in the country; at the onset of World War I the firm's operations were stopped. During the late sixties and early seventies, Nigeria was producing over 2 million barrels of crude oil per day and by 2010, the figured had increase to 4million barrels per day. Oil was discovered in Nigeria in 1956 at Oloibiri in Niger Delta after half a century of exploration. But you can't lay it on our doorstep."Â. Thereafter, license was given to D’Arcy Exploration Company and Whitehall Petroleum. History of oil in Nigeria. Red Cross official Attah Benson tells the AP why some refuse medical treatment. Inquisitive. March 2008 - Nigeria’s first 4D seismic acquisition in deepwater oil and gas operations was achieved at SNEPCo-operated Bonga field, 120km southwest of the Niger Delta. It created a fire that killed hundreds within hours and destroyed surrounding farmland and villages.Â, Early reports said that the explosion was caused by thieves trying to break open the pipeline in order to siphon off oil. Before the explosion, Nigerians outside of Jesse traveled there to scoop up oil that had been leaking from the pipeline. The first test-drilling for oil in Nigeria was at Ihuo (or Iho), near Owerri, present-day, Imo State, 1950. Pipeline syphoning still occurs. Link/Page Citation Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. The company spent over 6 million pounds prior to this discovery but they remain unrelenting in their search for crude of commercial quantity. British Petroleum, for example, spent £33,334 on a futile search for oil between 1918 and 1928; 5 the history of oil exploration in many of the African oil producing and exporting states seems to be remarkably brief. History of Oil and Gas in Nigeria. In 1996, the Center for Constitutional Rights, EarthRights International, and other law groups brought a series of cases against Shell for alleged human rights violations in the region. In 2002, 150 Nigerian women occupied a Chevron facility for 10 days. #HistoryVille pic.twitter.com/5zfUeheT9w Due to the region's abject poverty -- 70 percent of Nigerians live below the poverty line -- some resort to siphoning and selling oil from the region's 3,125-mile network of pipelines.Â, One of the nation's most deadly blasts occurred on Oct. 18, 1998, when a pipeline owned by the Nigerian National Petroleum Corp. (NNPC) exploded in Jesse, Nigeria. 1970 | Mobil started production from 4 wells at Idoho Field and Agip started production as the Department of Petroleum Resources Inspectorate commenced operations. Shell also owns the Forcados Terminal, which is capable of storing 13 million barrels (2,100,000 m3) of crude oil in conjunction with the nearby Bonny Terminal. Prior to the discovery of oil in 1956, the Nigerian Bitumen Corporation was involved in conducting exploratory work as far back as 1907. Production grew fast, and today, Nigeria pumps close to 2 million BPD, which makes it the largest producer of crude oil in Africa. An Introduction to Nigerian Oil and Gas A little-known fact, even amongst Nigerians, is that oil production started in Nigeria over 100 years ago, in September 1909 to be precise. Thereafter, license was given to D’Arcy Exploration Company and Whitehall Petroleum. 1963 | Elf discovered Obagi field and Ubata gas field, 1965 | Agip found its first oil at Ebocha and Phillips Oil Company started operations in Bendel State, 1966 | Elf started production in Rivers State with 12,000 b/d, 1967 | Phillips drilled its first well (Dry) at Osari – I and made its first oil discovery at Gilli-Gilli -I, 1968 | Mobil Producing Nigeria Limited) was formed and the Gulf’s Terminal at Escravos was commissioned. Crude oil is definitely one of the top 20 mineral resources in Nigeria and the history of oil exploration in Nigeria goes back to 1903 when Nigerian Bitumen Corporation led exploratory work in the nation. Crude Oil Production in Nigeria increased to 1424 BBL/D/1K in February from 1361 BBL/D/1K in January of 2021. Oil was first discovered in Nigeria in the mid-1950s after decades of fruitless exploration. Shell owns two, while Mobil, Chevron, Texaco, and Agip own one each. Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. In June 1956, Shell-BP discovered oil in the Oloibiri community. In June 2011, sabotaged pipelines cut into production so much that Shell declared force majeure, freeing itself from delivery obligations.Â. Instead, the oil company called the payout a “humanitarian gesture”. Royal Dutch Shell eventually paid out $15.5 million in 2009, but did not accept accountability. 1938 | Shell D’ Arcy granted Exploration license to prospect for oil throughout Nigeria. In the mid-1970s the output is more than two million barrels a day, the value of which is boosted by the high prices achieved during the oil … ; Nigeria consumes 0.10 gallons of oil per capita every day (based on the 2016 population of 185,960,241 people), or 35 gallons per capita per year (1 barrels). History of Crude Oil in Nigeria: Years & Events Timeline 1908 | Nigerian Bitumen Co. & British Colonial Petroleum commenced operations around Okitipupa. Aret Adams, a Nigerian oil industry analyst and former government adviser, 70 percent of Nigerians live below the poverty line, thieves trying to break open the pipeline, scoop up oil that had been leaking from the pipeline, Nigeria's environment has been harmed as well, Nigerian militants regularly kidnap foreign oil workers, 150 Nigerian women occupied a Chevron facility for 10 days, accused of killing other environmentalists in the region, SoCal Gas Has Permanently Stopped Leak in Gas Well Above Porter Ranch, State Confirms, Must Watch Docs: Five Thought-Provoking Energy Films For Summer, Is Climate Change "Not Debatable"? However, environmental groups claim that some spills are caused by pipeline corrosion and mismanagement by the oil companies. And they would prefer to die with their fear. 1977 | Government established the Nigerian National Petroleum Corporation (NNPC) by Decree 33, (NNOC & MPR extinguished). After that, British Petroleum and Royal Dutch Shell started producing crude oil and selling it. He is the founder and CEO of Nigerian Finder.com. His advocates say he was framed as he was well known for his criticism of Nigeria's military regime and oil dealings. HISTORY OF THE NIGERIAN PETROLEUM INDUSTRY Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. Other equally significant developments in the history of crude oil exploration and production include the first shipment of oil from Nigeria in 1958, the 1961 commissioning of Shell’s Bonny Terminal, the dawn of Texaco Overseas operations in Nigeria in 1961, the 1962 commencement of Safrap (Elf) and the NAOC operations in Nigeria, and the 1963 Elf discovery of oil in the Obagi field. Some writers allege that the petroleum Industry emerged from North America[1]. Nevertheless, each companies […] At the beginning of World War I the corporations operations were halted. Nigeria has become Africa's biggest oil producer, but the people of Oloibiri complain they have not seen much of the money made in the 52 years of oil production. Nigeria used part of its oil profits to pay the residual 40%, freeing up at least $1.15 billion annually for poverty reduction programmes. The occurrence and discovery of petroleum is no new phenomenon. 1971 | Shell’s Forcados Terminal and Mobil’s terminal at Qua Iboe commissioned, 1973 | First Participation Agreement; Federal Government acquires 35% shares in the Oil Companies Ashland started PSC with then NNOC (NNPC). A series of world oil price increases from 1973 produced rapid economic growth in transportation, construction, manufacturing, and government services. In 1977, the Nigerian National Petroleum Company (NNPC) was established as a state owned and controlled company involved in the upstream and downstream oil sectors. The discovery was made by Shell-BP, at the time the sole concessionaire. From that day the history of crude oil in Nigeria was made. History of the Nigerian Petroleum Industry Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. Shell is currently fighting a $100 million fine assigned by a Nigerian court, eschewing any responsibility for pollution caused by sabotage. Peter de Wit, director of Shell Netherlands, told the AP: "When it comes to issues of the safety of people and crime ... it's the responsibility of the government. Local land and water sources have been fouled by the oil industry, rendering areas useless that once kept fishermen and farmers employed. wing Provides an overview of Nigeria, including key events and facts about this oil-rich country with multiple ethnic and religious divides. Nigerian Traditional Art: A General Overview. 1962 | Elf and Agip Oil started operations in Nigeria. 1938 | Shell D’ Arcy granted Exploration license to prospect for oil throughout Nigeria. 2.2 The History of Oil and Gas in Nigeria. Some companies were given license to explore natural mineral resources. The early history (1908 - 1960) - The history of oil exploration in Nigeria dates back to 1908 when Nigerian Bitumen Corporation conducted exploratory work in the country; however, the firm left the country at the onset of World War I. Due to the lack of technological and financial resources of small oil companies, large oil companies took over the exploration of commercial oil in the country. Standard Oil, Royal Dutch Shell, and British Petroleum: The Original Super-Majors John D. Rockefeller, who began his career in refining, became the industry’s first “baron” in 1865, when he formed Standard Oil Company. The history of crude oil in Nigeria involves the various events that led to the discovery of petroleum in the country up until these modern times. 6 Nigeria is no exception and the published oil historiography includes no article or book devoted exclusively to the topic. Since oil operations began, 546 million gallons of oil have spilled into Nigeria's Niger Delta. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. Agip operates the Brass Terminal in Brass, a town 113 kilometres (70 miles) southwest of Port Harcourt and has a storage capacity of 3,558,000 barrels (565,700 m3). 1971. Shell made another giant stride in 1965 when the company discovered the EA field in the shallow waters of the southeastern part of Warri. The first oil well is alleged to have been dug in shush Iran about 500BC[2] and the first truly modern and commercial drilling of oil […] Oil was first found in Nigeria in 1956, then a British protectorate, by a joint operation between Royal Dutch Shell and British Petroleum. The find was made by Shell-BP, at the time the sole concessionaire. Charred remains found in the ruins were still grasping funnels and cans.Â, Some in the town refused medical help for fear of being blamed for the disaster, causing a spike of deaths due to untreated burns and wounds.Â. Nigeria now becomes one of the wealthiest countries in Africa thanks to its large reserves of oil (petroleum now, rather than the palm oil of the previous century). Over the past two decades, at least a dozen pipeline disasters have killed thousands in Nigeria.Â, Many pipeline explosions are said to have been caused by villagers tampering with the oil lines. 1991 | Signing of Memorandum of Understanding & joint Venture Operating Agreement (JOA), 1993 | SNEPCO signed the Production Sharing Contracts in a Sixth Participation Agreement with the likes of NNPC=55%, Shell=30%, Elf= 10% and Agip=5%. That's the equivalent of an Exxon Valdez Disaster happening every year for nearly 50 years. After the Biafran war in 1970, there was a rise in oil prices and the country was able to reap the instant riches from its oil production and a year later, Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC). The history of oil in Nigeria began before oil was even discovered in 1956 at Oloibiri, Bayelsa. Thereafter, license was given to D'Arcy Exploration Company and Whitehall Petroleum. Thus, since the discovery of crude oil in commercial quantity, the economic structure of Nigeria has changed considerably. In 2010, Nigeria provided about 10% of overall U.S. oil imports and ranked as the fifth-largest source for oil imports in the U.S. Thereafter, license was given to D’Arcy Exploration Firm and Whitehall Petroleum. Two years later, crude oil production in the country started from the same oil field with about 5100 barrels per day, making Nigeria an oil-producing nation. Chief of these firms were the Nigerian Bitumen Corporation in 1907. 2001 | Production of Okono offshore field. However, some activists are met with resistance and severe penalties for their work. Drilling activities commenced in 1951 with the first test well drilled in Owerri area and oil was discovered in non-commercial quantities at Akata, near Eket in 1953. Since oil operations began, 546 million gallons of oil have spilled into Nigeria's Niger Delta.Â, That's the equivalent of an Exxon Valdez Disaster happening every year for nearly 50 years.Â, The most controversial spills come from pipeline blasts. Harnessing Nigeria's Gas Resources. Thereafter, licenses were given to D'Arcy Exploration Companyand Whitehall Petroleum but neither company found oil of commercial value and they returne… Finally, the company discovered commercially available oil in Oloibiri, Nigeria which led to many more discoveries over the last 60 years. 1908 | Nigerian Bitumen Co. & British Colonial Petroleum commenced operations around Okitipupa. Oil History in Nigeria In 1956, the British Empire found oil in Nigeria. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream. Today, Nigeria is ranked 10th in the world in crude oil reserves. Mr Inengite was 19 years old when the foreign engineers came looking for oil … 1995 | SNEPCO starts drilling first Exploration well. That was still four years before Nigeria gained its independence. 1979 | Third Participation Agreement (throughout NNPC) increases equity to 60%; Fourth Participation Agreement; BP’s shareholding nationalised, leaving NNPC with 80% equity and Shell 20% in the joint Venture, 1984 | Agreement consolidating NNPC/Shel1 joint Venture, 1986 | Signing of Memorandum of Understanding (MOU). The early history (1908 – 1960) – The history of oil exploration in Nigeria dates back to 1908 when Nigerian Bitumen Corporation conducted exploratory work in the country; however, the firm left the country at the onset of World War I. In 1995, Ken Saro-Wiwa, an environmental activist from Nigeria's Ogoniland in the Niger Delta, and eight others were executed after spending months in prison. Mobil operates primarily out of the Qua Iboe Terminal in Akwa Ibom State, while Chevron owns the Escravos Terminal located in Delta State and has a storage capacity of 3.6 million barrels (570,000 m3). 1989 | Fifth Participation Agreement; (NNPC=60%, Shell = 30%, Elf=5%, Agip=5%). Beyond economic effects, Nigeria's environment has been harmed as well. They are afraid of being arrested. Currently, Nigeria is the largest oil producer in Africa and the production of petroleum in the country plays a dominant role in the economy with over 90% of gross earnings coming from crude oil. It was the same year NNPC commenced its retail outlet scheme. But by 1960, other oil companies had been given exploratory rights in the onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. Initially, Shell-BP was appointed as the sole concessionaire of oil exploration in the country. The country’s first field began producing in 1958 at a rate of 5,100 BPD. 2002 | New PSCs agreement signed and the downstream oil sector was liberalised. Local government and community leaders say destitute villagers are forced into pipeline vandalism because of vast socio-economic inequity. Now this territory is in Bayelsa. Nigeria consumes 428,000 barrels per day (B/d) of oil as of the year 2016.; Nigeria ranks 37th in the world for oil consumption, accounting for about 0.4% of the world's total consumption of 97,103,871 barrels per day. Yes, Says Science, BREAKING: ExxonMobil Oil Pipeline Bursts In Arkansas; 80,000 Gallons Spilled, Examining The State Department's Keystone XL Pipeline Report, Boating Oil Spills Can Be Wiped Out With Education, Says Study By Los Angeles Sustainability Collaborative, James Balog Of 'Chasing Ice' On Non-Renewable Energy's Glacial Impact, Shell Drilling Rig Runs Aground, Marks More Trouble For Arctic Oil Operations, Read Up: Great Articles On Cleveland East Ohio Gas Explosion. Ten year later, Shell D’arcy Petroleum Development Company of Nigeria, a consortium of Shell and British Petroleum (then known as Anglo-Iranian) began exploratory work following the issue of a new license covering 920,000 square kilometres (357,000 square miles). Over the past two decades, at least a dozen pipeline disastershave killed thousands in Nigeria. Nigeria - Nigeria - The arrival of the British: The Sokoto jihad and the Yoruba wars stimulated the slave trade at a time when the British were actively trying to stop it. Nigeria - History of Oil Exploration. 1961 | Shell’s Bonny Terminal was commissioned and Texaco Overseas started operations in Nigeria. The discovery was made by Shell-BP, at the time … A new body – The Nigerian National Oil Corporation (NNOC) - was created to handle direct commercial operational activities in the oil industry on behalf of the Federal Government, while the Department of Petroleum Resources in the Federal Ministry of Mines and Power continued to exercise statutory supervision and control of the industry. The early historical past (1908 – 1960) – The history of oil exploration in Nigeria dates back to 1908 when Nigerian Bitumen Company performed exploratory work within the country; nevertheless, the agency left the country on the onset of World Struggle I. Nigeria made history in April 2006 by becoming the first African country to completely pay off its debt (estimated $30 billion) owed to the Paris Club. People without jobs or food in their stomachs can be moved to desperate acts. That's not happening. The industry needs to put their money where their mouth is if it expects to end communal violence. 1956 | First successful well drilled at Oloibiri by Shell D’Arcy, 1956 | Changed name to Shell-BP Petroleum Development Company of Nigeria Limited, 1958 | First shipment of oil from Nigeria. Both Chevron and Royal Dutch Shell have worked with the NNPC for decades and coordinate much of the country's oil operations. Oil industry officials often blame greed and political maneuvering for the pipeline disasters. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. Notify me of follow-up comments by email. Aret Adams, a Nigerian oil industry analyst and former government adviser, told the AP. The history of oil industry is one of radical shifts in control and dominance. It was this year the Elf’s Odudu blend, offshore OML 100 cam on-stream. 1999 | NLNG’s First shipment of Gas out of Bonny Terminal. But when the World War 1 commenced, the firm had to stop operations. Following the end of the war, licences were given to the D’Arcy Exploration Company and Whitehall Petroleum but these companies were unable to find oil of commercial value, subsequently, they returned their licenses in 1923. "It smacks of wickedness, hard-heartedness," he says. On Oct. 23, the fire was finally put out by an American firefighting company. Crude Oil Production in Nigeria averaged 1869.14 BBL/D/1K from 1973 until 2021, reaching an all time high of 2475 BBL/D/1K in November of 2005 and a record low of 675 BBL/D/1K in February of 1983. 1955 | Mobil Oil Corporation started operations in Nigeria. Texaco operates the Pennington Terminal. At the beginning of 1958 – other foreign companies joined the operations in the crude oil production. The early history (1908 – 1960) – The history of oil exploration in Nigeria dates back to 1908 when Nigerian Bitumen Corporation conducted exploratory work in the country; however, the firm left the country at the onset of World War I. AN OVERVIEIW OF THE OIL AND GAS INDUSTRY IN NIGERIA BY DENNIS OTIOTIO Introduction Nigeria is located within the Sub – Sahara African region with a total land area of 923, 768.64 sq. The most controversial spills come from pipeline blasts. Nigeria - Nigeria - Economy: The Nigerian economy is one of the largest in Africa. Since the late 1960s it has been based primarily on the petroleum industry. The discovery was made by Shell-BP, at the time the sole concessionaire. Currently, there are six petroleum exportation terminals in the country. However, Nigeria ceased exports to the US in July 2014 because of the impact of shale production in America; India is now the largest consumer of Nigerian oil. Petroleum exploration in Africa was started by Shell in the 1930s and today still holds a very high deposit of Hydrocarbons, that have not been drilled. The discovery was made by Shell-BP, at the time the sole concessionaire. Overall, we’ve highlighted the major events in the history of crude oil in the country below: Abass is a seasoned freelance writer and internet marketer.