Business/Career Education

The Impact of Oil Discovery on Nigerian Communities

Impact of oil discovery on Nigerian communities
Written by Robin Okwanma

Throughout the time of colonial rule (1914 to 1959), Nigeria was a major exporter of agricultural products. Key export produce from Nigeria included oil palm, groundnut, cotton, and cocoa. All of that changed with the discovery of crude oil in Oloibiri, Bayelsa state in 1956. Much of the crude oil is concentrated in the Niger Delta region – the area located within the Gulf of Guinea to the south of Nigeria. The Niger Delta region leads from the Niger-Benue confluence into the Atlantic Ocean. However, the impact of oil discovery on indigenous Nigerian communities has tilted enormously to the negative side. 

At present, a total of ten coastal oil-producing states are within the Niger Delta. Namely Edo, Delta, Bayelsa, Rivers, Cross River, Imo, Anambra, Abia, Akwa Ibom, and Ondo states. Benue, Kaduna, and other states within the Chad Basin (northeast Nigeria) have also joined the list. Additionally, Nigeria currently earns over 70 percent of its foreign revenue from crude oil. Nigeria is also the 10th largest producer of crude oil worldwide, and the 3rd largest producer in Africa. The country has no less than an estimated 37.1 billion barrels of crude oil reserves, and 206.5 trillion cubic feet of natural gas reserves (as of January 2023). These are in addition to an abundance of other mineral resources owned by the country. 

Unfortunately, such impressive statistics run contrary to Nigeria’s true economic status. Many areas of the country remain underdeveloped. And of its over 200 million citizens, it is confirmed that Nigeria has 133 million people (or more) who are multidimensionally poor. Let us briefly examine the impact of oil discovery on Nigerian communities so far. 

Challenges Faced by Nigeria’s Crude Oil Industry: The Fallouts of Oil Discovery

A number of challenges have inhibited the benefits derived from oil discovery and Nigeria’s crude oil industry in general. They include the following:

Pipeline Vandalism 

There have been numerous cases of illegal drilling and damage inflicted on oil pipelines by vandals, in order to steal the crude oil. Alongside this, these pipelines often deteriorate, and are left at the mercy of criminals who further damage them. To worsen the situation, these pipeline vandals deliberately tamper with other crude oil installations and plants, either by burning or bombing such places. Some of these attacks are carried out by militant groups in the area, in a bid to get the attention of the affected oil companies. 

Thus, crude oil and its byproducts are stolen in huge amounts while in transit (or during refining), a situation known as ‘bunkering’. Additionally, several on-site fire outbreaks have been recorded; and massive pollution of the water, soil, and air repeatedly take place. Such acts of sabotage also contribute to recurrent cases of scarcity of petroleum products, as well as increasing costs of such products. 

Between October 2018 and September 2020, a total of 3342 pipeline points were vandalized across the country. The data was collated by a satellite tracker owned by NOSDRA (National Oil Spill Detection and Response Agency). And over 15 billion Naira have been spent on pipeline repairs. 

Yet again, the available oil and gas pipeline infrastructure in the country is not adequate for the current production capacity (or potential). 

Illegal Oil Mining, Oil Theft and Bunkering

There are claims that a good number of top Nigerian government officials and military officers are involved in illegal oil mining, bunkering, and oil theft. It is also on record that over 1 million barrels of crude oil have been stolen by ‘corporate’ oil thieves. This is easy, as many Nigerian oil companies merely give an estimate of their production volumes with the use of dipsticks. 

Even more upsetting is the seeming connivance of the Nigerian National Petroleum Corporation (NNPC) in massive fraud and mismanagement cases in Nigeria’s crude oil industry. As such, one can expect inaccurate figures to be recorded along the way. Additionally, there is a tendency to deliberately falsify records of crude oil export volumes for selfish gain. 

Environmental Pollution

The most obvious effect of crude oil discovery on Nigerian communities, is the shocking levels of environmental pollution within the vicinity. For decades, several water bodies, lands, and surrounding air have been contaminated during crude oil and gas exploration, transportation, and processing. 

For instance, it took a long time for the government to stop widespread gas flaring. Now there are more determined efforts to make liquefied natural gas available to local consumers. But before this happened, a lot of damage had been done to the environment. The Niger Delta region notably experiences rainfall for most of the months of the year (except for the August break). It has led to frequent cases of acid rain – which causes corroded human skins and metallic structures, and further poisoning of the environment.  

It has also produced acute cases of black soot being released into the air – a noticeable problem in Port Harcourt and its environs. Thus, the air and water quality has been badly affected from the settling of soot all over the place. As a result, many indigenes now suffer from resultant respiratory problems. In fact, the environment is gradually acquiring a darkened, uncomfortable look.    

Similarly, uncontrolled levels of oil spillage have been taking place every year from the onset. It has led to massive poisoning of agricultural lands, water bodies, and vegetation. Additionally, many fishes, birds, and animals have been killed off; and agricultural lands have become progressively less productive. Thus, several farmers and fishermen in the Niger Delta have been displaced from their ancestral vocation because of the environmental damage. The development has fueled inflation due to reducing agricultural yields, and high cost of food (and other goods). 

Between January 2019 and April 2021, about 881 cases of oil spills have been recorded by NOSDRA. This took place in over 11 oil-producing states, amounting to about 43,000 barrels of spilled crude oil. Most of these oil spills were due to oil bunkering and theft. In yet another report, a total of 108 oil spill cases occurred between November 2022 and February 2023 alone. And well over 619.7 million barrels of crude oil were lost to oil theft between 2007 and 2020, according to NEITI (Nigeria Extractive Industries Initiative).

Weak Government Regulations

The government equally erred in its reluctance to force oil prospectors to be accountable for their actions. There have been feeble and almost ineffective cases of government intervention to clean up the polluted environment in recent times. Yet again, even though there are existing federal laws that can curb the environmental damage, they have not been effectively enforced as expected. 

Reversing the Negative Effects of Oil Discovery in Nigeria

We must acknowledge recent efforts by the Nigerian government to stop the abuses in the crude oil industry. In recent months, there have been negotiations between government representatives and militant groups in the Niger Delta region. This is in a bid to fend off criminals from the crude oil facilities. Furthermore, security operatives (notably members of the Nigerian Army and Naval Forces) have tightened security measures around oil mining sites and infrastructure within the region. This is in spite of cases involving hostility or resistance by indigenes of the host communities (who feel threatened by military presence).

But beyond this, it is pertinent for the government to insist on enforcing laws that will effectively regulate the crude oil industry. Certain communities (and individuals) have taken it upon themselves to take negligent oil companies to court – in demanding compensation for damages. With the support of the government, such oil prospecting companies will be forced to abide by necessary environmental safety regulations. Otherwise, they should be made accountable for whatever damage they cause (rather than take bribes to allow them go scot-free).  



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About the author

Robin Okwanma

Hi, I'm Robin Okwanma. Software Engineer || Django, Python || React, React Native || Blogger. Technical Writer.

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