Integrierte Ländliche Entwicklung (ILE) Niger und Burkina Faso Burkina Faso Niger.
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INTRODUCTION
The Nigerian environment is one blessed with abundant flora and fauna. Prior to
the discovery of oil in 1956, the country was known to be highly dependent on
the agricultural sector which contributed over 75 percent of export earnings
before 1970. Since then, however, agriculture has stagnated while the rate of
crude oil exportation has always been on a consistent increase. Nigeria’s
petroleum exportation has improved from its first 5000 barrels exported in 1958
to the 2.5 million barrels per day in 2004. There is no doubt that there has been
a tremendous improvement in the Nigerian petroleum industry and this has to
some extent been advantageous to the Nigerian economy. However the price
which the environment has had to pay for this development far outweighs its
advantages. The areas where this oil is extracted most of the time have to bear
the brunt of incidents emanating majorly from oil spillage, gas flaring and other
minor sources such as drill cuttings, drilling mud and effluents. The effects are
hazardous to the environment and its effects range from soil infertility to health
risks which could lead to eventual loss of life as witnessed by the Erovie
community. The government and the multinational companies therefore have a
major role to play in the prevention of such incidents. This five chapter thesis
therefore gives us an insight into the environmental degradation suffered by
these oil producing areas and the measures taken by the government in curbing
it.
The first chapter of this project gives us an insight into petroleum and the
environment. It Traces its history to the earliest discovery and portrays its impact
on the world today. I have also briefly given an insight into the possible effect it
might have on the environment. The case study of this thesis is the Niger Delta
region which is presently making the headlines due to its present troubled state.
This chapter therefore gives us an understanding of the region and looks into
aspects such as its geography, ethnic composition and its environmental
characteristics. Chapter one also gives readers an insight into the petroleum
industry in Nigeria (past and present).
The second chapter of this thesis is an analysis of the source of this pollution in
the region. Environmental pollution from the oil industry arises from various
sources which range from drill cuttings, drilling mud and effluents to other major
sources such as oil spillage and gas flaring. Oil spillage and gas flaring are the
two most important sources which will be analysed in chapter two.
The following chapter takes a look at the impact this environmental pollution has
had on our environment with a review of the various major pollution incidents
that have occurred in the Nigeria with particular reference to the Niger Delta
region.
The fourth chapter takes a look at the various laws in existence which regulates
the environment and the extent to which environmental standards have been
implemented. The role of the judiciary in the protection of the environment with
particular reference to the case of Gbemre v Shell Petroleum Development
Company is another major issue which will be looked into in this chapter.
Our environment is a reflection of who we are and protecting it should therefore
be prioritized because our environment is critical to our well-being and survival
presently as well as the generations to come. The government must therefore
make optimum use of our petroleum resource and at the same time act as
responsible environmental stewards for our overall benefit.
CHAPTER ONE
HISTORICAL BACKGROUNDS AND DEFINITION OF
CONCEPTS
1.0 Petroleum and the Environment:
Petroleum which is the cornerstone of this thesis is a multipurpose
substance we all know to be found underground. It contains a lot of
energy and can be converted to various fuels such as gasoline,
kerosene and heating oil etc. Petroleum is classified as a fossil fuel
due to the fact that it is gotten from the remains of plants, animals
and most especially marine organisms which have passed through
the process of decomposition. Energy is a necessary ingredient of
any economy and petroleum is one of the chief sources of energy in
the world today. It can therefore be rightly said that petroleum is a
major force behind the sustenance of most developing and
developed economies today. The energy in petroleum is gotten from
the energy in plants and animals which can be traced to its original
source which is the sun.
According to Georg Bauer a renowned German mineralogist, “...petroleum
is a naturally occurring, flammable liquid found in rock formations in the
Earth consisting of a complex mixture of hydrocarbons of various
molecular weights, plus other organic compounds”1. Petroleum is made up
of hydrocarbons and can exist in liquid, solid and gaseous form. In liquid
form, it is known as crude oil, in gaseous form, it is known as natural gas while in
Solid form it appears as coal, shale, bitumen, tar sands etc. Petroleum or crude
oil is a naturally occurring oily, bituminous liquid composed of various
organic chemicals. It is found in large quantities below the surface of Earth
and is used as a fuel and as a raw material in the chemical industry.
Modern industrial societies use it primarily to achieve a degree of mobility
—on land, at sea, and in the air—that was barely imaginable less than 100
years ago2. Petroleum is earlier referred to as a multipurpose substance
because it has various uses. Some of these uses include.
1. Fuels for Transportation; Liquid products such as gasoline, jet
fuel, and marine fuel which together account for more than
half the volume of output, serve the transportation industry.
Petroleum can therefore be seen as very vital to the
sustenance of our modern day transportation industry
2. Fuels for energy production; Petroleum fuels heat homes,
factories, and offices and also generate electric power
3. Nonfuel products; From each of the fractions distilled from
crude oil or its cracked or processed products, valuable and
indispensable non fuel materials are made. Some of the major
products falling under this category are: ethylene, propylene,
butylenes, and other reactive gases for petrochemical
industries output of polymers, rubbers, chemicals, textiles and
so on.
1 Georg bauer. De Natura Fossilium. translated 19552 Doscher, Todd M. "Petroleum." Microsoft® Encarta® 2009 [DVD].
4. It is however noteworthy that this petroleum which is very
essential to various developed and developing nations is a
finite resource and therefore cannot be renewed once it has
been extracted.3
Petroleum according to the Petroleum Act is defined is said to
include “...mineral oil (or any related hydrocarbon) or natural gas
as it exists in its natural state in strata, and does not include coal
or bituminous shales or other stratified deposits from which oil
can be extracted by destructive distillation”4. From the
aforestated definition we can see that mineral oil or natural gas
in its natural state is what is referred to as petroleum. It is
completely harmless to the environment in situ but once it is
extracted complications begin to occur. Petroleum itself is
therefore not the problem but the exploration process which
reveals a lack of regard for the environment.
As the saying goes, our environment which we live and work is a
reflection of our attitudes. Our level of regard for our
environment will always be portrayed by the environment around
us. The environment is the complex of physical, chemical and
biological factors/processes which sustain life. Man is part of this
network of components which make up the planetary system.
Science and history are both agreed that before the advent of
man, the environment had already existed. Thus the environment
3 Amyx, J.W.1960.Petroleum Reservoir Engineering. McGraw-Hill Encyclopaedia of science and Technology. p. 804 Section 15 (1) Petroleum Act 1969 Cap 350 LFN
preceded, man and by deduction, also preceded the human
technological and scientific development activities. It may rightly
be postulated that this environment before the advent of man
was pure and “unspoiled.”5The activity of man for very long time
has been known to be detrimental to the environment and this
situation intensified with the rapid technological advancement
peculiar to the 21st century. The Niger delta environment which is
the subject matter of this thesis is currently in a state of
upheaval which can be traced to social, economic and most
importantly environmental factors. The environmental
degradation suffered by this region has become an increasing
concern globally in recent times. Although there are other factors
responsible for this crises, the environment should come first as
it guarantees our continued existence. The environment is man's
first right. Without a safe environment, man cannot exist to claim
other rights, be they political, social, or economic. Our
environment should be of paramount concern to us at all times
because it guarantees not only our existence, but that of our
future generations
1.1 Petroleum Development in Nigeria:
Petroleum development in Nigeria can be traced to the early
activities of the Nigerian Bitumen Co. of Germany & British Colonial
5 Okorodudu-Fubara M T 1998 Law of Environmental Production pp 15
Petroleum when they began operations around Okitipupa in
1908.Although their activities were cut short by the outbreak of the First
World War. The modern oil industry in Nigeria began with the discovery of
oil in Nigeria. Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger
Delta after half a century of exploration. The discovery was made by Shell-
BP, at the time the sole concessionaire. Nigeria joined the ranks of oil
producers in 1958 when its first oil field came on stream producing 5,100
bpd. After 1960, exploration rights in onshore and offshore areas adjoining
the Niger Delta were extended to other foreign companies. In 1965 the EA
field was discovered by Shell in shallow water southeast of Warri.
In 1970, the end of the Biafran war coincided with the rise in the world oil
price, and Nigeria was able to reap instant riches from its oil production.
Nigeria joined the Organisation 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.
Following the discovery of crude oil by Shell D’Arcy Petroleum, pioneer
production began in 1958 from the company’s oil field in Oloibiri in the
Eastern Niger Delta. By the late sixties and early seventies, 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.
Petroleum production and export play a dominant role in Nigeria's
economy and account for about 90% of her gross earnings. This dominant
role has pushed agriculture, the traditional mainstay of the economy, from
the early fifties and sixties, to the background.6
In a bid to critically analyze the development of petroleum in Nigeria, it is
important take into consideration, the major players in the industry. The
Nigerian oil industry over time has metamorphosed into an industry where
there are only two major participants namely; the government and the
multinationals. For a more comprehensible chronological sequence of
petroleum development in Nigeria, I will therefore be taking a dynamic
and critical look at the history of both foreign participation and
government participation in the Nigerian oil industry and how they have
affected petroleum development.
1.1.1 Foreign Participation:
Foreign participation in the Nigerian oil industry dates back to the Nigerian
Bitumen Company and its activities prior to the outbreak of the First World
War. British businessman, John Simon Bergheim convinced the Colonial
Office and the Government of Southern Nigeria that based on his
knowledge of the region's geology, petroleum existed in Southern Nigeria
and that his company, the Nigeria Bitumen Corporation, could find it. He
had already achieved a monopoly on prospecting rights in Nigeria by
buying up all other drilling licenses.
6 Retrieved 6th may 2009 from http:\\www.nnpcgroup.org
For the next six years, officials in the Colonial Office protected Bergheim's
monopoly of the prospecting rights, rewrote mining legislation at his
request creating the Southern Nigerian Mining Regulation (Oil Ordinance)
of 1907 and provided the Nigeria Bitumen Corporation with a loan to
support its search for petroleum. By 1912, the Corporation had sunk about
15 wells in Southern Nigeria, east wards from the Lekki lagoon towards
the Niger Delta, and had already spent 143,000 pounds.
In September that year, however, Bergeim was killed in an automobile
accident and with him died much of the aggressive drive to find oil in
Nigeria. Thus, the first search for oil in Nigeria ended in mid-1913 and was
not resumed seriously for almost 25 years. Shortly after Bergeim's death,
World War 1 set in and oil exploration in the country ceased until 1937,
when an Anglo-Dutch consortium, Shell D' Arcy, came to Nigeria and had
the whole country as one concession. Between 1938 and 1939, the
company drilled seven bore-holes for about 16,296 pounds around Owerri
without any success. This second phase of the search for oil in the country
was interrupted by World War II (1939-1945) but by 1951, the company
had drilled its exploration well, called IHUO-1.
A second well soon followed in 1953 called AKATA-1, with just marginal
gas. Between 1953 and 1955, Shell had drilled 13 additional wells. It
eventually struck its first commercial well in 1956 at Oloibiri in present-
day Bayelsa State. That discovery, after an investment of over 30 million
naira, proved the venture commercially viable. Later, in the same year,
more oil was found at Afam in Rivers State. Subsequently, the
construction of pipelines from Oloibiri to Port Harcourt was undertaken to
facilitate export. The export of the first cargo of crude oil took place on 17
February, 1958.
The successes of Shell encouraged other companies to join in the
exploration race. Mobil had been awarded the Sokoto Basin, the Benue
Trough and fringes of the Niger Delta to explore in 1956. After some
seismic and field geological surveys in the Sokoto Basin where it recorded
no success, it withdrew from Sokoto and obtained licence to explore in the
Dahomey Basin. Between 1959 and 1961, Mobil had drilled four wells in
Dahomey Basin which were dry and the company pulled out of the area.
Meanwhile, in 1959, the sole concession right over the whole country,
earlier granted to Shell, was reviewed and exploration rights were
extended to other foreign companies.
This was in line with the policy of increasing the pace of exploration, while
at the same time ensuring that the country was not too dependent on one
company or nation. Shell thus, relinquished about 50 per cent of its Niger
Delta concession and retained the successful or potentially successful
parts. In April 1960, Tenneco, an American company, arrived in Nigeria,
and was granted a concession along the western coast. This was the
position when, in October 1960, Nigeria gained independence from
Britain.
The attainment of independence in 1960 led to intense exploration
activities, as the nation put in place policies that would lead to major
economic and political changes in the oil sector. Firstly, exploration
companies outside Britain and U.S.A. were invited to establish presence
and explore in Nigeria. Oil was also becoming a vital energy fuel, and
Nigeria's production had more than tripled from 5,000 barrels per day in
1958, to 17,000 barrels per day in 1960.
Within the first five years of independence, therefore, no less than nine
international oil companies had become active in Nigeria, namely: Shell-
BP, Mobil, Tenneco, Texaco, Gulf (now Chevron), Safrap (now Elf), Agip,
Philip and Esso. These internationals were soon joined, in the late 1960s,
by Japan Petroleum, Occidental, Deminex, Union Oil, Niger Petroleum and
Niger Oil Resources. The climax of that era was the forma tin of the
Nigerian National Oil Corporation (NNOC), the predecessor of the Nigerian
National Petroleum Corporation (NNPC), and the admission of Nigeria into
OPEC, the Organisation of Petroleum Exporting Countries, in July, 1971.
Oil production had, by this period, moved from 17,000 barrels per day
(bpd) in 1960 to 45,000 bpd in 1966 and later to 1 million barrels per day
in 1970, shortly after the civil war. Nigeria's economy became increasingly
dependent on crude oil, on account of revenue accruing thereof, to meet
the challenges of the post-civil war era. The Nigerian government also
entered into joint venture agreements with several multinational oil
companies engaged in oil exploration and production activities in the
country.
In January 1986, the government introduced more attractive fiscal terms
for private sector participation in oil and gas development in the country.
This was through a Memorandum of Understanding (MOU) providing a
guaranteed margin of two dollars per barrel to the producing companies in
exchange for certain exploration and enhanced recovery commitments.
Five years later, the government offered new MOU's which provided for
much better terms in recognition of inflation and to encourage foreign
partners to continue to expand their investments. Since then, the
investments of the major oil companies in the country have risen steadily
in response to these incentives. This response has been most evident not
only in the oil sector but also in the vast and continuing expansion of
activities in the gas sector, led by Shell, Mobil and Chevron.7
The big six refers major foreign owned oil companies participating in joint
ventures agreements in Nigeria. They include Shell, Chevron, Mobil, Agip,
Elf and Texaco and are all partners to joint venture agreements with the
NNPC in Nigeria. These six multinational oil companies still remain a
dominant force in the Nigerian oil industry despite governments ever
growing dominance in the in the industry, it is a known fact that the
multinational oil companies still play a major role in the industry which on
the long run is less beneficial to the host country (Nigeria) and more
beneficial to foreign economies. Kwame Nkrumah was right to have
referred to these multinational oil companies as being neo-colonialist
when he stated inter alia “...Africa is a paradox which illustrates and
highlights neo-colonialism her earth is rich, yet the products that come
from above and below her soil continue to enrich not
Africans predominantly but groups and individuals who operate to Africa’s
7 Obasi,N K , Foreign Participation in the Oil and Gas Industry, Retrieved March.28,2009 from http://www.nigerianonline.com
Impoverishment…. If Africa’s multiple resources were used in her own
development,
They could place her among the modernized continents of the world. But
her resources
have been, and still are, being used for the greater development of
overseas
Interests”8. Except we are able to develop our technical-know-how in the
oil industry to an acceptable standard there is a very slim chance of any
change in the near future.
1.1.2 Government Participation:
Government participation in the Nigerian oil industry can be said to be a
recent development it was not until Nigeria joined the Organisation of
Petroleum Exporting Countries in 1971 that the government began to play
a major role in the industry. Nigeria’s decision to join OPEC marked a turn
around and a giant step towards government participation in the industry.
Prior to this time, government participation in the industry was very
limited. However, the 1962 resolution on permanent sovereignty over
natural resources was said to have set the ball rolling in the crusade for
government participation in the industry.
In accordance with OPEC'S 1968 and 1971 Resolutions urging member countries
to participate in oil operations by acquiring ownership in the concessions held by
foreign companies, Nigeria's Military government in 1971 established the
8 K. NKRUMAH, “Neo-colonialism: The Last Stage of Imperialism”, London: Thomas Nelson & Sons Ltd.1965.
Nigerian National Oil Corporation (NNOC) by Decree. The NNOC was empowered
to acquire any asset and liability in existing oil companies on behalf of the
Nigerian government, and to participate in all phases of the petroleum industry.
In that same year, the government acquired 33% and 35% of the operating
interests of Agip and Elf respectively. Further acquisitions occurred in 1973 and
1974 in the operations of all the other foreign oil companies. Government
participation in the commercial oil sector continues to this day through the
NNPC. The NNPC was formed in 1977. It inherited the commercial activities of the
NNOC and the supervisory/regulatory role of the Federal Ministry of Petroleum
Resources. However a de-merger took place in 1984 and presently, the NNPC
undertakes commercial activities, whilst the Federal Ministry of Petroleum
Resources acting through the Department of Petroleum Resources (DPR) is the
regulatory authority.9The NNPC, ever since its establishment has served as a link
between the government and the multinationals and also helps the government
to keep a tab on the activities of the oil and gas sector. The NNPC also
participates in joint venture agreements with these multinational oil companies
and has sixty percent interests in the joint venture agreements.
1.2 The Nigerian Oil Industry
The Nigeria is the second largest producer of crude oil in Africa and is
blessed with abundant natural gas reserves. as at 2006 Nigeria was the
largest oil producer in Africa and the sixth
largest in the world, averaging 2.7 million barrels per day (bbl/d) with
9 Akinjide&co Nigeria: A Guide To The Nigerian Energy Sector – Oil
proven oil reserves at 35.2 billion barrels10. In February 2007, the then
state minister for petroleum Dr. Edmund Daukoru put Nigeria's proven oil
reserves at about 35 bn barrels, a major increase from 5 bn barrels in
199911.The growth of the Nigerian oil industry has been stunted by the
persistent Niger Delta crises forcing the shutdown of major oil stations in
Niger Delta area. Their tactical asymmetrical warfare has been
detrimental to the growth of the oil industry and this will continue being
the case unless an agreement is made. As of April 2007, an estimated
587,000 bbl/d of crude production is shut-in. The majority of shut-in
production is located onshore in the Niger Delta, with the exception of the
offshore 115,000 bbl/d EA Platform. Since December 2005, Nigeria has
lost an estimated 16 billion dollars in export revenues due to shut-in oil
production. Shell has incurred the majority of shut-in oil production
(477,000 bbl/d), followed by Chevron (70,000 bbl/d) and Agip (40,000
bbl/d). Militant attacks on oil infrastructure have also crippled Nigeria’s
domestic refining capabilities. In February 2006, militant attacks in the
western delta region forced the Warri (125,000 bbl/d) and Kaduna
(110,000 bbl/d) refineries to shutdown due to a lack of feedstock. In
December 2006, operators shutdown Nigeria’s two Port Harcourt refineries
for two months due to technical problems. The Niger Delta rebel group,
Movement for the Emancipation of the Niger Delta (MEND) and other
militia organizations in search of monetary compensation and/or political
leverage are the ones behind the attacks. In addition to abductions,
thousands of foreign workers and their families have left the Niger Delta 10 Nwilo, P.C. & O.T. Badejo, 2005 Oil Spill Problems and Management in the NigerDelta. International Oil Spill Conference,Florida, USA.11 Retrieved from www.thefreelibrary.com 19 April 2009
due to continued hostilities. At least three companies, including a private
drilling company and pipeline laying company have also left. MEND has
stipulated numerous conditions to the Nigerian government that it wants
met or else it has vowed to continue the attacks. Chief among the
conditions is greater revenue sharing of the oil wealth, increased local
control of oil property, the release of tribal prisoners, and transparency of
government budgets. International oil companies (IOCs) are not expected
to repair damaged oil infrastructure until after the elections are over12. As
a result of these conflicts, Nigeria’s production rate is on a constant
decline and according to statistics; the situation has shown little or no sign
of improvement. Production at Nigeria's oil facilities may have continued
to drop drastically, owing to increasing tension in the oil-producing region,
Niger Delta. Leaving no respite for smooth operation, the act of militancy
in the region has halted several production activities, which had resulted
in shut-in of about 25 per cent of the nation's oil production capacity of
2.6 million barrels per day (bpd).The production, which stood at 1.88
million barrels per day as at mid January, may have dipped further with
current shut-in from major oil facilities in the Niger Delta. The latest, being
the force majeure declared by Shell at its Bonny oil terminal, leaving its
productions at 90,000 bpd, from the normal level of 500,000bpd.The
Guardian gathered that before the Shell's pronouncement, shut-ins due to
militant attack stood at 40,000bpd.Besides the militant induced shut-in,
Nigeria is compelled to comply with the automatic cut by the members of
the Organisation of Petroleum Exporting Countries (OPEC) to support
12 Retrieved 23 April 2009 from http://www.eia.doe.gov/cabs/Nigeria/Oil.html
global oil prices. It had therefore trimmed about 160,000 bpd, being its
share of the 2.2 million bpd OPEC output cut.13
The table above represents Nigeria’s Oil Production from 1986-2006.A
sharp decline is noticed in the last two years. This decline occurs due to
the ethnic unrest in the Niger Delta region. The persistent conflicts in the
region has affected Nigeria’s oil production rate drastically even up to the
time of this writing.
1.2.1 Upstream Sector
This is the most important sector of the Nigerian oil industry as it
accounts for a huge chunk of Nigeria’s total export. Over the
years, the Nigerian government has concentrated more on this
13 Salau S. Nigeria's oil production dips further, as militants continue onslaught. The Guardian. Wednesday, February 18, 2009
sector. The production rate would have increased drastically if
not of the violence in the Niger Delta region. The upstream sector
still remains very important to the Government and this is largely
due to the fact that it constitutes a major proportion of Nigeria’s
foreign exchange earnings. The Upstream activities in the
Nigerian oil and gas sector include;
(i) Petroleum Exploration and Exploitation.
(ii) Search for development of local substitute for such items as
Medium pressure valve, pumps, shallow drilling equipment,
Drilling mud, bits fittings, drilling cements etc.
(iii) Manufacturing of consumable materials in exploration such
as explosives, detonators, steel castings, magnetic tapes etc.
(iv) Other areas in the services sector of the upstream are:
1. Construction and Installation
2. Maintenance
3. Pipelines
4. Well Services and
5. Transportation Support Services.14
1.2.1 Downstream Sector
14 Retrieved 6th may 2009 from http:\\www.nigeriagalleria.com/investment
This sector deals with post production in the oil and gas sector
and includes refining and processing stages. Transportation is an
integral aspect of the downstream sector and pipelines are very
essential at this stage. Oil and gas pipelines come under the
heading of transportation. From experience, the cheapest, most
convenient and reliable means of transporting petroleum from
field to a land destination within a reasonable distance is through
pipelines.15Downstream activities majorly include;
(i) Domestic Production and marketing of Liquefied Petroleum
Gas (LPG)
(ii) Manufacturing of LPG cylinders, valves and regulators,
installation of filing plants, Retail distribution and development of
simple, flexible and much less expensive gas burner to
encourage the use of gas instead of wood and other fuels.
(iii) Establishment of processing plants and industries for:
- The production of refined mineral oil, petroleum jelly and
grease.
- The manufacture of bituminous based water/damp-proof
building materials such as roofing sheets, floor tiles, rubber
products, tarpaulin. Building of asphalt storage, packaging and
blending plants to handle the product for export.
15 See Etikerense pp 85
(iv) Establishment of chemical industries such as distillation units
for the production of naphtha and other special boiling point
solvents used in plant and other food processing industries.
(v) Establishment of industries for processing Linear Alkyl
Benzene, Carbon Black and Polypropylene.
(vi) Development of Phase II (Phase III to join later) of Nigeria’s
Petrochemical Programmed.
(vii) Participation in all phases of the Nigeria Gas Industry
development programmed from exploration, gathering,
production and processing to transmission.
(viii) Establishment of small scale industries to produce chemicals
and Solvents, for example Chlorinated methane, Formaldehyde,
Acetylene, etc., from natural gas.
(ix) Refining: One condition for purchasing Nigerian Crude Oil is
the ownership of an efficient refinery. The shelter which the
domestic petroleum products market enjoys, almost completely
seals the prospects and viability of privately financed refinery for
locally consumed petroleum products. However, opportunities
exist for the construction of a refinery in bonded premises with
adequate export facilities for dedication to the export market.
(x) Products Marketing: Petroleum Product Marketing would seem
sealed with hardly any opportunity except by way of establishing
an independent marketing outfit or aspiring to establish
dealership with the marketers.
The nation’s pipeline and depot network consists of 3,001km of
pipeline of varying sizes as well as sixteen (16) storage depots.
These pipelines and networks traverse the length and breathe of
the country. The system therefore must be maintained in a
healthy state for effective and efficient distribution of products.16
1.3 Niger-Delta: The Area and the People
Nigeria's oil is mainly produced from the Niger Delta area, eighty per cent of
which is located in Delta, Rivers and Bayelsa states. These three states produce
75% of the nation’s petroleum. Other states within which the Delta is situated
are Edo, Cross River, Akwa Ibom and Ondo States. The Delta covers over 20,000
square kilometres, and is one of the largest deltas in the world. The people of the
Niger Delta are primarily from the minority tribes of Nigeria and are very poor.
They lack modern infrastructure and live under poor health conditions.17The
Niger delta region is predominantly composed of people living in poverty. It is a
region which produces most of Nigeria’s petroleum which is her Nigeria’s chief
source of income.
1.3.1 Geographical Definition of the Niger Delta
Niger Delta covers all the land between latitude 4o151N and 4o501N and
longitude 5o251E and 7o371E with a total area of 20,000km2.The Niger Delta, as
now defined officially by the Nigerian Government, extends over about 70,000
km² and makes up 7.5% of Nigeria’s land mass. Historically and cartographically,
16 Retrieved 6th may 2009 from http:\\www.nigeriagalleria.com/investment 17 Omorogbe Y Oil and Gas Law in Nigeria 2003 p 143-144
it consists of present day Bayelsa, Delta and Rivers States. In the year 2000,
however, Obansanjo's regime expanded its definition to include Abia State, Akwa
Ibom State, Cross River State, Edo State, Imo State and Ondo State. Some 31
million people of more than 40 ethnic groups including the Ijaw and Igbo people,
speaking some 250 dialects live in the Delta.18The delta region in Nigeria is
known to be one of the largest deltas in the world.
1.3.2 Biological Diversity of the Niger Delta
The Niger Delta is a region blessed with abundant flora and fauna. The Niger
River is an important ecosystem that needs to be protected, for it is home to 36
families and nearly 250 species of fish, of which 20 are endemic, meaning they
are found nowhere else on Earth. Our constant exploration for oil has been
detrimental to the flora and fauna in this region. There is a gradual depletion of
this ecosystem and these species are fast becoming extinct. The rich flora and
fauna of the area supplied the immediate source of livelihood for the people of
the region for many generations. For so long the people lived in harmony, and
there was evident balance in the ecosystem.
The Niger Delta region is characterised by wetlands and water bodies with creeks
and rivers criss-crossing the entire southern parts. However the region is
endowed with enormous natural resources. The region one of the world's largest
mangrove forest with the most extensive freshwater swamp forests and tropical
rain forests characterised by great biological diversity. Some of the more
common tree species in this region include; Lophira alata, Pycnanthus
angolensis, Ricinodendron heudelotii, Sacoglottis gabonensis, Uapaca spp.,
Hallea ledermannii, Albizia adianthifolia, Irvingia gabonensis, Klainedoxa
18 United Nations Framework Convention on Climate Change." UNFCC. Nov. 2003.
gabonensis, Treculia africana, and Ficus vogeliana. The oil palm (Elaeis
guineensis) is common, and the understory is often dominated by rattans (e.g.
Calamus deerratus). The second zone is the eastern delta flank, which is
shrinking relative to the western flank. Some lowland forest non-swamp species
are found here (e.g. Ogilby's Duiker Cephalophus ogilbyi and Sclater's Guenon
Cercopithecus sclateri). The third zone is the central backswamp area of the
delta, crossed by old creek levees. This area is not often flooded and is not
influenced by the tides, and hence relatively stable. Most of the forest here is
always waterlogged. The only systematically collected data for the Niger Delta's
vegetation comes from this zone. The distribution of tree species in the forest is
determined by hydrology with drier remnants of levees being more diverse than
the waterlogged back swamps. The forest is dominated by the following tree
species: Euphorbiaceae (Uapaca spp., Klaineanthus gaboniae, Anthostema
aubreyanum, Macaranga spp.) Annonaceae (Xylopia spp., Hexalobus crispiflorus)
Guttiferae (Symphonia globulifera, Pentadesma buteraceae), Rubiaceae (Hallea
ledermannii, Rothmannia spp.), Myristicaceae (Coelocaryon preussii, Pycnanthus
marchalianus), and Ctenolophonaceae (Ctenolophon englerianus).19
1.3.3 Ethnic Composition of the Niger Delta:
The Niger delta region is composed of diverse ethnic groups with
different cultures. Hence, ethnic conflict is a major source of the
current unrest in the region. Over the years there has been a range of
contradictory opinions as to the ethnic groups which compose the
Niger delta. While many perceive the Niger delta to be synonymous
with oil producing areas, others define the region in terms of its
ethnography. ‘The 1958 Nigerian Constitutional provision for the Niger
Delta inter alia states as follows:19 Zabbey,N Impact of Extractive Industries on the Biodiversity of the Niger Delta Region, Nigeria 2007
To allay the fears of the minority indigenes of the Niger Delta and
address the development needs of the peculiar terrain of the Niger
Delta, before granting independence to Nigeria, the British Government
proposed that the Niger Delta be declared a Special Federal Territory.
Linguistically, ethnographically and culturally, the Niger Delta of the
pre-crude oil and gas era comprised a bewildering mix of ethnic
groups. Among these, the communities of the Ijaw (in Eastern and
Western), the Ogoni, Itsekiri, Urhobo, Isoko, Ikwerre and Delta Igbo hit
more headlines than others did. These are the several communities in
the present-day Rivers, Bayelsa and Delta States as well as part of
Ondo State. Misconceptions concerning the correct focus of the Niger
Delta made more controversial, more complex and politically incorrect
public debates on effective answers to the vexatious questions
involved. For example, while presenting the Niger Delta Development
Commission (NDDC) Bill to the Senate, President Olusegun Obasanjo
included Ondo, Imo, Abia and Edo States. Furthermore, Governors of
various states as far as Anambra were jostling for inclusion in the Niger
Delta.20
20 Retrieved April 7th 2009 from http://www.earthrights.net/nigeria/news/definition.html