The history of oil exploration Nigeria
dates back to 1908, when a German entity,
the Nigerian bitumen corporation commenced exploration activities in araromi area,
of Ondo state, Nigeria. These pioneering efforts which ended abrupt with the outbreak
of the First World War in 1946 yielded some of boreholes and confirmed a line of oil
spillage in eastern Dahomey Basin in Okitipua Ondo State.
Oil prospecting effort resumed in 1973,
when shell D’Archy (the forerunner of
shell Petroleum Development Company of Nigeria) was awarded the sole concessionary
rights covering the whole territory of Nigeria. it’s activities were also
interrupted by the second world war, but resumed in 1974. Concerted effort after
several years led to the first discovery in Oloibiri, Bayelsa State.
This discovery opened up the oil industry in 1961
bringing in Mobil, Agip, and Safrap,
(Elf), Tenneco and Amoseas (Texaco and Chevron respectively) to join the exploration
efforts both in the onshore and areas of Nigeria. This development was enhanced by the
extension of the concessionary rights previously a monopoly of Shell, to the newcomers.
The objective of the government in doing this, was to the pace of exploration and
production of Petroleum. Even now more companies, both foreign and indigenous have won
concessionary rights and are producing.
Actual oil production and export
from the Oloibiri field in present day Bayelsa State
commenced in 1958 with an initial production rate of 5,100 barrels of crude oil per
day. Subsequently, the quantity doubled the following year and progressively as more
players came onto the oil scene, the production rose to 2.0 million barrels per day in
1972 and a peaking at 2.4 million barrels per day in 1979. Nigeria thereafter, attained
the status of a major oil producer, ranking 7th in the world in 1972, and has since
grown to become the sixth largest oil producing country in the world.
Production of oil
in commercial quantity commenced in 1958 at 5,000 barrels per day
(bpd) and reached 17,000 barrels p/d on 1960.At that time , the multinational oil
companies operating in the country bore the risk and cost of exploration, development,
production and acquired title to all crude oil produced. They also paid rent, royalty
and taxes from the operations.
Prior to 1963,
the interest of federal government in oil industry activities was handed
on departmental basis by the Hydrocarbon section, the Department of Petroleum Resources
and Nigeria Petroleum Refining Company (NPRC) which were under the Federal Ministry of
Mine and Power (FMMP).
Nigeria had attained a production
level of over 2 million barrels of crude oil a day.
Although production figures dropped in the eighties due to economic slump, 2004 saw a
total rejuvenation of oil production to a record level of 2.5 million barrels per day.
Current development strategies are aimed at increasing production to 4million barrels
per day by the year 2010.