It is no news that 76.5% of Nigeria's export is from crude oil, disproportionately exposing the country's fragile economy, its foreign exchange reserves and local currency value to shocks in the international crude oil market. Blessed with 37billion barrels of crude oil reserves2, 200trillion cf of natural gas3 and over 42 solid minerals in commercial quantities, Nigeria has unfortunately not been blessed with the most forward-thinking political elites who, for the past 52 years, have failed to transform Nigeria's resource wealth to a better quality of life for the majority of the country's 200 million people.
Without a doubt, Nigeria needs to urgently diversify its export earnings from crude oil, but it lso needs to simultaneously maximise its wealth from the entire spectrum of Natural Resources especially non renewable energy sources like crude oil which will ultimately run out in less than 5 decades at the current low daily production rate - or be replaced by other cheaper and cleaner energy sources sooner. Crude oil (along with a combination of several other factors) retired Whale oil as the dominant energy source of the industrial revolution in the 19th century - sending the entire whaling industry into extinction.
Clean energy sources - solar, wind, wave etc, are now loudly threatening to make crude oil extinct even before countries like Nigeria exhaust their entire Oil Reserves - it is only now a matter of time. Indeed, it is difficult to fight an energy source whose time has come.
In this light; non-state actors - CSOs, international development organisations, donors, working together with state actors must engage in a final lap in the race to help Nigeria make hay while the sun shines, even though it is now dangerously close to sunset for crude oil.
Indeed, COVID-19 has changed the world as we know it. A crisis of this scale has its way of jolting leaders into reality - potentially spurring them to implement appropriate policy responses - that is if they do not waste the crisis.
In this document, we highlight outstanding natural resources issues that will not go away on their own and hence need emergency and long-route intervention, we discuss which issues should be priority and propose intervention strategies non-state actors can adopt to catalyse appropriate policy response from state-actors in a post-COVID-19 world.
b. Brief History of Oil in Nigeria
Greed of the masters
The British colonial masters, like successive governments after them, had appropriated to themselves all rights to minerals found beneath the soil, laying the foundation denial of land rights to indegineous people across Nigeria.
Contrary to several notions that if the British knew we had oil, they might not have given us independence on a "platter of gold", oil exploration began in 1908, drilled from the heavy oil seeps which occur in the cretaceous Abeokuta formation, 200 kilometres east of Lagos. The company, Nigeria Bitumen Corporation actually drilled 14 wells in Lagos before they ended operations due to emergencies of World War 1.
In 1937, two years before the Second World War, Shell D'Arcy (later Shell-BP), an Anglo-Dutch conglomerate received the colonial mandate to explore oil in any area of Nigeria. Early chance to fully explore was punctured by another five years of World War II. Restarting again in 1946 with geological surveys, Nigeria drilled its first oil in 1951. It came up with nothing. In November 1955, Mobil Exploration Nigeria Incorporated carried out a preliminary geological survey of Sokoto province in the Northern Region.
Commercial oil found
After a few misses in the foot of the Delta, on August 3, 1956, an attempt at the Oloibiri led to a commercial discovery. Oloibiri started production with 5,100 barrels per day of crude. As at then, Nigeria was Shell D'Arcy's blank state till it reduced its concession to 40,000 square miles in 1957 and finally 15,000 square miles in 1960s, holding firmly the Oil Mining Lease, right to mine oil. On February 17, 1958, Nigeria joined the class of oil-producing countries as the first oil shipment left the Port Harcourt Harbor. An 18,000-ton Hemifusus tanker left the shores of Nigeria, destined for Shell Haven Refinery, located at the mouth of River Thames. Shell-BP went ahead to sink 17 more wells, an area that produced oil for more than 20 years.
Nigeria's oil was a quick magnet for the developed countries with the ease of access to Europe and the increasingly "belligerent" attitude of Egypt tied to the nationalization of the Suez Canal as well as alignment to Nigeria's sweet crude blend with its low sulphuric content (0.3%) made refining cheaper in contrast to oil from Venezuela and also the Middle East. As at 1966, the United Kingdom was still the highest importer of Nigeria's crude taking 36.3% of exports, followed by Western Germany (12.9%) and France (10.7%).
Oil discovery soared in Bomu in 1958 and with expanding fields, another Bonny Tanker terminal was opened in April 1961. Oil production was also swelling at the Western end of Ughelli and the Trans-Niger pipeline was connected in 1965, to bring the crude shipment to the Bonny Terminal.
The pace of Nigeria's discovery continued with the discovery of the first offshore oil field at Okan, Escravos in 1964. Bonny which along with Nembe, Opobo, Forcados, Brass, Escravos, were holding points for slavery, now became Nigeria shipping export terminal.
1969: The long walk to reform
As at 1969, when the famous oil legislation that had withstood over 48 years was decreed, nine companies explored oil in Nigeria holding concessions over 44,857 square miles, approximately 4.8% of Nigeria's landmass. The biggest concession was held by Shell-BP Petroleum company, a total of 18,898 square miles, followed by Safrap (Nigeria) Limited (9,336 sq miles) and Gulf Oil Nigeria Limited (6,855 sq miles). It was clear that most acquisition of concessions was mere appropriation without clear seismic data with oil companies holding concessions in present-day Kwara, Benue, Plateau and Lagos States.
In the context of Nigeria's economy, oil was not a huge difference in the 1960s. As of 1967, it accounted for only 3% of the GDP. 50% of Nigeria's output was agriculture with 25% of the contribution being linked to domestic demand. Nigeria's agriculture distribution was well diversified. As at 1966, oil was already taken to a domineering place with exports value were tied to Petroleum (33%) Cocoa (25%), Groundnuts including cake and oil (25%), Palm Oil (7%). The share of petroleum exports fell rapidly to 18% in the civil war.