A look at the Petroleum Industry in Nigeria

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Nigeria is the largest economy in Africa and it is the largest producer of oil and gas in Africa.

Oil exploration in Nigeria can be traced as far back to 1907, but it was until 1956 that oil was discovered in Oloibiri, Niger Delta area of Nigeria. It was discovered by Shell-BP which was the only concessionaire then.  Other important oil wells were also discovered in Ogoni territory.

Oil production began in 1957 but it was only until 1958 when its first oil field came on stream that Nigeria joined the list of oil producing countries of the world. A total of 847,000 tonnes of crude was exported between 1957 and 1960. Oil exploration license were given to non British firms in the late 1950s and early 1960s. Mobil, Tenneco, started exploring in Nigeria in the year 1955, 1960 respectively, while, Gulf oil and Chevron started in 1961, and in 1962 Elf and Agip started exploring.

After Shell D’Arcy Petroleum discovery of petroleum, the first production began in 1958 in oloibiri at the company’s oil field. By the late 1960s and early 1970s the country as attained a production level of 2 million barrel per day. Due to the slump experienced in the economy, production level of the crude oil dropped in the 1980s. the country’s oil production bounced back and increased to a record high of about 2.5 million barrels per day

The production of petroleum plays a major role in the economic development of Nigeria. It accounts for about ninety percent of the country’s total gross domestic product. Agriculture which was the major source of revenue generation in the 1950s and 1960s in Nigeria was neglected because of the major role played by the petroleum industry in revenue generation in the country.

Below are some of the major events that played out in the history of Nigeria oil and gas

  • 1908

Search for crude oil commenced in okitipupa by the Nigerian Bitumen Co. and British colonial petroleum.

  • 1938

Operating license was granted to Shell D’Arcy to search for oil throughout the country.

  • 1955

Nigeria granted Mobile Oil the license to operate in the country

  • 1956

Shell D’Arcy successfully drilled the first oil well in Oloibiri.

Shell D’Arcy successfully changed its name to Shell-BP Petroleum Development Company of Nigeria Limited.

  • 1958

The first time that oil was shipped from Nigeria.

  • 1961

The Bonny Terminal was commissioned by Shell.

Nigeria granted operations to Texaco overseas

  • 1962

Operations was granted to Elf and Agip oil

  • 1963

Obagi field was discovered by Elf including the first production of the Ubata gas field gulf

  • 1965

Operations in Bendel state was started by Phillips oil.

Agip first oil was found in Ebocha.

  • 1966

Production was started in river state by Elf with 12,000 barrel per day

  • 1968

The formation of Mobil Producing Nigeria Ltd.

The commissioning of Escravos Gulf’s terminal

  • 1969

Petroleum Resources Inspectorate department was started.

Production started by Agip.

  • 1971

The commissioning of forcados terminal by Shell.

Mobil terminal was also commissioned in Qua.

  • 1973

The drilling of Ogharefe oil well discovered by Pan Ocean Corporation

  • 1975

The upgrading of DPR to petroleum resources ministry

  • 1976

MPE was also upgrade to petroleum resource ministry

  • 1984

The consolidation of NNPC/Shell agreement

  • 1986

A memorandum of understanding was signed

  • 1995

Final decision on investment was taken by NLNG

  • 1999

First shipment of Gas from Bonny Terminal by NLNG

  • 2000

The contract signing between Nigerian petroleum Development Company and Nigerian Agip Oil Company.

  • 2002

Retail outlet scheme was commenced by NNPC.

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