Discovery of Crude Oil in Nigeria; A Blessing or a Curse
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Transcript of Discovery of Crude Oil in Nigeria; A Blessing or a Curse
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Bolawa FadojutimiCRUDE OIL IN NIGERIA;
A Blessing or a Curse
Northwestern University, Capstone PresentationMasters in Project Management
May 2012
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CONTENT
•NIGERIA • BACKGROUND INFORMATION•HISTORY OF OIL IN NIGERIA•IMPACTS OF THE OIL INDUSTRY• ECONOMY• ENVIRONMENT• PEOPLE• AGRICULTURE•FUTURE OUTLOOK• CONCLUSION
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NIGERIA – BACKGROUND INFORMATION
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LOCATION Western Africa
POPULATION 170million (7th largest in the world)
CLIMATETropical Region
RESOURCESNatural Gas, Crude Oil, Tin, Iron Ore, Limestone, Niobium, Lead and Zinc
AGRICULTURAL PRODUCTS Cocoa, Peanuts, Cotton, Palm Oil, Corn, Rice, Sorghum, Millet, Tapioca (cassava), Yams, and Rubber
NIGERIA – BACKGROUND INFORMATION
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HISTORY OF OIL IN NIGERIA
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OIL IN NIGERIA - HISTORY
1908 Exploration commenced
Brought to an abrupt end by WW I19141937Resumed by Anglo - Dutch consortium
19471956Commercial discovery in the Niger Delta (5100bpd)
CIVIL WAR1967 - 1970
• Oil production grossly affected• Irregularities in sharing formula• Ethnic clashes, 2,000,000 lives lost
Brought to an abrupt end by WW II
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OIL BOOM
70’s
• Enormous wealth creation• Other sectors took the backseat
• Refineries built in 1978, 1980 and 1989
Kaduna Refinery
OIL IN NIGERIA - HISTORY
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6th Largest producer of oil in the world
Produce 2.46m barrels of oil per day
Import 33m liters per day
OIL IN NIGERIA - PRODUCTION
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•Job creation through the sector
90% Foreign earnings
40% GDP contribution In 2011
OIL IN NIGERIA
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IMPACTS OF THE OIL INDUSTRY
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ECONOMY – BACKGROUND INFORMATION
•Highly dependent on the agricultural sector up until the 70’s
64%1963 - 1964
4.1% I 5.9 %1970 – 1985
REVENUE CONTRIBUTION
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ECONOMY
SECTOR 1960 1970 1980 1990 2000 2002
AGRICULTURE 64.10% 47.60% 30.80% 39.00% 35.70% 28.35%
MANUFACTURING 4.80% 8.20% 8.10% 8.20% 3.40% 5.50%
CRUDE PETROLEUM 0.30% 7.10% 22.00% 12.80% 47.50% 40.60%
OTHERS 30.80% 37.10% 39.10% 40.00% 13.40% 25.55%
SECTOR CONTRIBUTION TO GDP
• Economic policies have been centered around oil sector
“…We have suffered a great deal in this country from our inability or unwillingness to manage our oil resources properly. When oil prices are high like now, a great deal of optimism sets in and we tend to spend all that we earn to meet our admittedly tremendous needs…”
Minister of Finance, Dr (Mrs.) Ngozi Okonjo-Iweala,
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ECONOMY
EARNED AND PROJECTED VALUE OF EXPORTS
• 2010 – US$ 65.073 billion• 2011 –US$ - 87.92 billion
EARNINGS
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ECONOMY
CURSE
BLESSING• Giant of Africa
• Staggering revenues• Access to international loans
• Collapse of infrastructure• Lack of evident development • 21% unemployment rate
• 70% of population below poverty line
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ENVIRONMENT – BACKGROUND INFORMATION
NIGER DELTA REGION
70,000km2, 800 communities
Freshwater swamp forestsMangrove forest
Lowland rainforestsBarrier island forests
Non renewable resources Natural gas, Fossil fuels, and Construction materials
Renewable resources Timber, Vegetables, Fruits, Nuts and Seeds and Medicinal plants
60-80% of all Nigerian plant and animal species
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ENVIRONMENT – BACKGROUND INFORMATION
Oil exploration activities• Massive dynamiting for geological excavations
• Explosions in aquatic environments• Burying of oil and gas pipelines
• OIL SPILLAGE• A reduction in habitat area.•Death of wildlife and aquatic life
•Disruption of wildlife breeding patterns
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ENVIRONMENT - OIL SPILLAGE STATISTICS
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ENVIRONMENT - OIL SPILLAGE
Oil spillages of 1.68m gallons of oil
In 2011, SPDC reported
• Spread over 356 square miles• Worst oil spill in the region in the last decade
• Arguments over figures released
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Environmental Restoration
30years, $1bn for first 5years
ENVIRONMENT - RESTORATION
UNITED NATIONS ENVIRONMENTAL PROGRAMME
•Extreme levels of pollution•Arable land heavily contaminated•Drinking water contains pollutants
CURSE
2011 ASSESSMENT
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PEOPLE – BACKGROUND INFORMATION
140 ETHNIC GROUPS
• Loss of fishing areas• Exposure to varying diseases
• Child birth defects and chronic illnesses• Loss of thousands of coastal lands and
farmlands
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PEOPLE
MILITANT GROUPS• Claim to fight for the right of the people
• Involved in kidnappings• Sabotaging government efforts
CURSE• Loss of farmland and water bodies• Deteriorating state of infrastructure
• Lack of access to portable water and educational facilities
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AGRICULTURE – BACKGROUND INFORMATION
95% of nations food needs
64.1% GDP contribution
In the 60’s met
Current Situation• Less than 50% of arable land cultivated• Small scale, using age old methods
• Employs 70% of population
• Major revenue generator 1914 – 1970’s• Employed a large percentage of the population
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AGRICULTURE
$4bn Importation on food
35.4% GDP contribution In 2011
SECTOR 1960 1970 1980 1990 2000 2002
AGRICULTURE 64.10% 47.60% 30.80% 39.00% 35.70% 28.35%
MANUFACTURING 4.80% 8.20% 8.10% 8.20% 3.40% 5.50%
CRUDE PETROLEUM 0.30% 7.10% 22.00% 12.80% 47.50% 40.60%
OTHERS 30.80% 37.10% 39.10% 40.00% 13.40% 25.55%
SECTOR CONTRIBUTION TO GDP
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AGRICULTURE – SECTOR REVITILIZATION
VISION 2020 &MILLENIUM DEVELOPMENT GOALS 2015
• Ensuring local food needs are met • Major exporter of foodstuffs
• Boost the sector
TARGETS AND ASPIRATIONS
partnering
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CURSE
AGRICULTURE
• 4.6% allocation in federal budget• Economic policies don’t support sector
• Loss of arable lands to exploration activities
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FUTURE OUTLOOK
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FUTURE OUTLOOK
?
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CONCLUSION
• DECENTRALIZATION OF ECONOMY
• REVAMPING OF ALL SECTORS
• GOVERNMENT ACCOUNTABILITY
•IMPLEMENTATIONOF GOALS
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Q & ATHANK YOU