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16227990 impact-of-petroleum-development-on-the-environment-a-case-study-on-the-niger-delta-by-labode-adegoke-esq

16227990 impact-of-petroleum-development-on-the-environment-a-case-study-on-the-niger-delta-by-labode-adegoke-esq






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    16227990 impact-of-petroleum-development-on-the-environment-a-case-study-on-the-niger-delta-by-labode-adegoke-esq 16227990 impact-of-petroleum-development-on-the-environment-a-case-study-on-the-niger-delta-by-labode-adegoke-esq Document Transcript

    • INTRODUCTIONThe Nigerian environment is one blessed with abundant flora and fauna. Prior tothe discovery of oil in 1956, the country was known to be highly dependent onthe agricultural sector which contributed over 75 percent of export earningsbefore 1970. Since then, however, agriculture has stagnated while the rate ofcrude oil exportation has always been on a consistent increase. Nigeria’spetroleum exportation has improved from its first 5000 barrels exported in 1958to the 2.5 million barrels per day in 2004. There is no doubt that there has beena tremendous improvement in the Nigerian petroleum industry and this has tosome extent been advantageous to the Nigerian economy. However the pricewhich the environment has had to pay for this development far outweighs itsadvantages. The areas where this oil is extracted most of the time have to bearthe brunt of incidents emanating majorly from oil spillage, gas flaring and otherminor sources such as drill cuttings, drilling mud and effluents. The effects arehazardous to the environment and its effects range from soil infertility to healthrisks which could lead to eventual loss of life as witnessed by the Eroviecommunity. The government and the multinational companies therefore have amajor role to play in the prevention of such incidents. This five chapter thesistherefore gives us an insight into the environmental degradation suffered bythese oil producing areas and the measures taken by the government in curbingit.The first chapter of this project gives us an insight into petroleum and theenvironment. It Traces its history to the earliest discovery and portrays its impacton the world today. I have also briefly given an insight into the possible effect itmight 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 intoaspects such as its geography, ethnic composition and its environmentalcharacteristics. Chapter one also gives readers an insight into the petroleumindustry in Nigeria (past and present).The second chapter of this thesis is an analysis of the source of this pollution inthe region. Environmental pollution from the oil industry arises from varioussources which range from drill cuttings, drilling mud and effluents to other majorsources such as oil spillage and gas flaring. Oil spillage and gas flaring are thetwo most important sources which will be analysed in chapter two.The following chapter takes a look at the impact this environmental pollution hashad on our environment with a review of the various major pollution incidentsthat have occurred in the Nigeria with particular reference to the Niger Deltaregion.The fourth chapter takes a look at the various laws in existence which regulatesthe environment and the extent to which environmental standards have beenimplemented. The role of the judiciary in the protection of the environment withparticular reference to the case of Gbemre v Shell Petroleum DevelopmentCompany 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 thereforebe prioritized because our environment is critical to our well-being and survivalpresently as well as the generations to come. The government must thereforemake optimum use of our petroleum resource and at the same time act asresponsible environmental stewards for our overall benefit.
    • CHAPTER ONE HISTORICAL BACKGROUNDS AND DEFINITION OF CONCEPTS1.0 Petroleum and the Environment:Petroleum which is the cornerstone of this thesis is a multipurposesubstance we all know to be found underground. It contains a lot ofenergy and can be converted to various fuels such as gasoline,kerosene and heating oil etc. Petroleum is classified as a fossil fueldue to the fact that it is gotten from the remains of plants, animalsand most especially marine organisms which have passed throughthe process of decomposition. Energy is a necessary ingredient ofany economy and petroleum is one of the chief sources of energy inthe world today. It can therefore be rightly said that petroleum is amajor force behind the sustenance of most developing anddeveloped 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, “...petroleumis a naturally occurring, flammable liquid found in rock formations in theEarth consisting of a complex mixture of hydrocarbons of variousmolecular weights, plus other organic compounds”1. Petroleum is made upof hydrocarbons and can exist in liquid, solid and gaseous form. In liquidform, it is known as crude oil, in gaseous form, it is known as natural gas while inSolid form it appears as coal, shale, bitumen, tar sands etc. Petroleum or crudeoil is a naturally occurring oily, bituminous liquid composed of variousorganic chemicals. It is found in large quantities below the surface of Earthand 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 100years ago2. Petroleum is earlier referred to as a multipurpose substancebecause 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.3Petroleum according to the Petroleum Act is defined is said toinclude “...mineral oil (or any related hydrocarbon) or natural gasas it exists in its natural state in strata, and does not include coalor bituminous shales or other stratified deposits from which oilcan be extracted by destructive distillation”4. From theaforestated definition we can see that mineral oil or natural gasin its natural state is what is referred to as petroleum. It iscompletely harmless to the environment in situ but once it isextracted complications begin to occur. Petroleum itself istherefore not the problem but the exploration process whichreveals a lack of regard for the environment.As the saying goes, our environment which we live and work is areflection of our attitudes. Our level of regard for ourenvironment will always be portrayed by the environment aroundus. The environment is the complex of physical, chemical andbiological factors/processes which sustain life. Man is part of thisnetwork of components which make up the planetary system.Science and history are both agreed that before the advent ofman, the environment had already existed. Thus the environment3 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 humantechnological and scientific development activities. It may rightlybe postulated that this environment before the advent of manwas pure and “unspoiled.”5The activity of man for very long timehas been known to be detrimental to the environment and thissituation intensified with the rapid technological advancementpeculiar to the 21st century. The Niger delta environment which isthe subject matter of this thesis is currently in a state ofupheaval which can be traced to social, economic and mostimportantly environmental factors. The environmentaldegradation suffered by this region has become an increasingconcern globally in recent times. Although there are other factorsresponsible for this crises, the environment should come first asit guarantees our continued existence. The environment is mansfirst right. Without a safe environment, man cannot exist to claimother rights, be they political, social, or economic. Ourenvironment should be of paramount concern to us at all timesbecause it guarantees not only our existence, but that of ourfuture generations1.1 Petroleum Development in Nigeria: Petroleum development in Nigeria can be traced to the earlyactivities of the Nigerian Bitumen Co. of Germany & British Colonial5 Okorodudu-Fubara M T 1998 Law of Environmental Production pp 15
    • Petroleum when they began operations around Okitipupa in1908.Although their activities were cut short by the outbreak of the FirstWorld War. The modern oil industry in Nigeria began with the discovery ofoil in Nigeria. Oil was discovered in Nigeria in 1956 at Oloibiri in the NigerDelta after half a century of exploration. The discovery was made by Shell-BP, at the time the sole concessionaire. Nigeria joined the ranks of oilproducers in 1958 when its first oil field came on stream producing 5,100bpd. After 1960, exploration rights in onshore and offshore areas adjoiningthe Niger Delta were extended to other foreign companies. In 1965 the EAfield 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 oilprice, and Nigeria was able to reap instant riches from its oil production.Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in1971 and established the Nigerian National Petroleum Company (NNPC) in1977; a state owned and controlled company which is a major player inboth the upstream and downstream sectors.Following the discovery of crude oil by Shell D’Arcy Petroleum, pioneerproduction began in 1958 from the company’s oil field in Oloibiri in theEastern Niger Delta. By the late sixties and early seventies, Nigeria hadattained a production level of over 2 million barrels of crude oil a day.Although production figures dropped in the eighties due to economicslump, 2004 saw a total rejuvenation of oil production to a record level of2.5 million barrels per day. Current development strategies are aimed atincreasing production to 4million barrels per day by the year 2010.
    • Petroleum production and export play a dominant role in Nigeriaseconomy and account for about 90% of her gross earnings. This dominantrole has pushed agriculture, the traditional mainstay of the economy, fromthe early fifties and sixties, to the background.6In a bid to critically analyze the development of petroleum in Nigeria, it isimportant take into consideration, the major players in the industry. TheNigerian oil industry over time has metamorphosed into an industry wherethere are only two major participants namely; the government and themultinationals. For a more comprehensible chronological sequence ofpetroleum development in Nigeria, I will therefore be taking a dynamicand critical look at the history of both foreign participation andgovernment participation in the Nigerian oil industry and how they haveaffected petroleum development.1.1.1 Foreign Participation:Foreign participation in the Nigerian oil industry dates back to the NigerianBitumen Company and its activities prior to the outbreak of the First WorldWar. British businessman, John Simon Bergheim convinced the ColonialOffice and the Government of Southern Nigeria that based on hisknowledge of the regions geology, petroleum existed in Southern Nigeriaand that his company, the Nigeria Bitumen Corporation, could find it. Hehad already achieved a monopoly on prospecting rights in Nigeria bybuying 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 Bergheimsmonopoly of the prospecting rights, rewrote mining legislation at hisrequest creating the Southern Nigerian Mining Regulation (Oil Ordinance)of 1907 and provided the Nigeria Bitumen Corporation with a loan tosupport its search for petroleum. By 1912, the Corporation had sunk about15 wells in Southern Nigeria, east wards from the Lekki lagoon towardsthe Niger Delta, and had already spent 143,000 pounds.In September that year, however, Bergeim was killed in an automobileaccident and with him died much of the aggressive drive to find oil inNigeria. Thus, the first search for oil in Nigeria ended in mid-1913 and wasnot resumed seriously for almost 25 years. Shortly after Bergeims 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 hadthe whole country as one concession. Between 1938 and 1939, thecompany drilled seven bore-holes for about 16,296 pounds around Owerriwithout any success. This second phase of the search for oil in the countrywas interrupted by World War II (1939-1945) but by 1951, the companyhad drilled its exploration well, called IHUO-1.A second well soon followed in 1953 called AKATA-1, with just marginalgas. Between 1953 and 1955, Shell had drilled 13 additional wells. Iteventually struck its first commercial well in 1956 at Oloibiri in present-day Bayelsa State. That discovery, after an investment of over 30 millionnaira, 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 tofacilitate export. The export of the first cargo of crude oil took place on 17February, 1958.The successes of Shell encouraged other companies to join in theexploration race. Mobil had been awarded the Sokoto Basin, the BenueTrough and fringes of the Niger Delta to explore in 1956. After someseismic and field geological surveys in the Sokoto Basin where it recordedno success, it withdrew from Sokoto and obtained licence to explore in theDahomey Basin. Between 1959 and 1961, Mobil had drilled four wells inDahomey 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 wereextended to other foreign companies.This was in line with the policy of increasing the pace of exploration, whileat the same time ensuring that the country was not too dependent on onecompany or nation. Shell thus, relinquished about 50 per cent of its NigerDelta concession and retained the successful or potentially successfulparts. In April 1960, Tenneco, an American company, arrived in Nigeria,and was granted a concession along the western coast. This was theposition when, in October 1960, Nigeria gained independence fromBritain.The attainment of independence in 1960 led to intense explorationactivities, as the nation put in place policies that would lead to majoreconomic and political changes in the oil sector. Firstly, exploration
    • companies outside Britain and U.S.A. were invited to establish presenceand explore in Nigeria. Oil was also becoming a vital energy fuel, andNigerias production had more than tripled from 5,000 barrels per day in1958, to 17,000 barrels per day in 1960.Within the first five years of independence, therefore, no less than nineinternational 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 andNiger Oil Resources. The climax of that era was the forma tin of theNigerian National Oil Corporation (NNOC), the predecessor of the NigerianNational Petroleum Corporation (NNPC), and the admission of Nigeria intoOPEC, 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 dayin 1970, shortly after the civil war. Nigerias economy became increasinglydependent on crude oil, on account of revenue accruing thereof, to meetthe challenges of the post-civil war era. The Nigerian government alsoentered into joint venture agreements with several multinational oilcompanies engaged in oil exploration and production activities in thecountry.In January 1986, the government introduced more attractive fiscal termsfor 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 inexchange for certain exploration and enhanced recovery commitments.Five years later, the government offered new MOUs which provided formuch better terms in recognition of inflation and to encourage foreignpartners to continue to expand their investments. Since then, theinvestments of the major oil companies in the country have risen steadilyin response to these incentives. This response has been most evident notonly in the oil sector but also in the vast and continuing expansion ofactivities in the gas sector, led by Shell, Mobil and Chevron.7The big six refers major foreign owned oil companies participating in jointventures agreements in Nigeria. They include Shell, Chevron, Mobil, Agip,Elf and Texaco and are all partners to joint venture agreements with theNNPC in Nigeria. These six multinational oil companies still remain adominant force in the Nigerian oil industry despite governments evergrowing dominance in the in the industry, it is a known fact that themultinational oil companies still play a major role in the industry which onthe long run is less beneficial to the host country (Nigeria) and morebeneficial to foreign economies. Kwame Nkrumah was right to havereferred to these multinational oil companies as being neo-colonialistwhen he stated inter alia “...Africa is a paradox which illustrates andhighlights neo-colonialism her earth is rich, yet the products that comefrom above and below her soil continue to enrich notAfricans predominantly but groups and individuals who operate to Africa’s7 Obasi,N K , Foreign Participation in the Oil and Gas Industry, Retrieved March.28,2009 fromhttp://www.nigerianonline.com
    • Impoverishment…. If Africa’s multiple resources were used in her owndevelopment,They could place her among the modernized continents of the world. Buther resourceshave been, and still are, being used for the greater development ofoverseasInterests”8. Except we are able to develop our technical-know-how in theoil industry to an acceptable standard there is a very slim chance of anychange in the near future.1.1.2 Government Participation:Government participation in the Nigerian oil industry can be said to be arecent development it was not until Nigeria joined the Organisation ofPetroleum Exporting Countries in 1971 that the government began to playa major role in the industry. Nigeria’s decision to join OPEC marked a turnaround and a giant step towards government participation in the industry.Prior to this time, government participation in the industry was verylimited. However, the 1962 resolution on permanent sovereignty overnatural resources was said to have set the ball rolling in the crusade forgovernment participation in the industry.In accordance with OPECS 1968 and 1971 Resolutions urging member countriesto participate in oil operations by acquiring ownership in the concessions held byforeign companies, Nigerias Military government in 1971 established the8 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 empoweredto acquire any asset and liability in existing oil companies on behalf of theNigerian government, and to participate in all phases of the petroleum industry.In that same year, the government acquired 33% and 35% of the operatinginterests of Agip and Elf respectively. Further acquisitions occurred in 1973 and1974 in the operations of all the other foreign oil companies. Governmentparticipation in the commercial oil sector continues to this day through theNNPC. The NNPC was formed in 1977. It inherited the commercial activities of theNNOC and the supervisory/regulatory role of the Federal Ministry of PetroleumResources. However a de-merger took place in 1984 and presently, the NNPCundertakes commercial activities, whilst the Federal Ministry of PetroleumResources acting through the Department of Petroleum Resources (DPR) is theregulatory authority.9The NNPC, ever since its establishment has served as a linkbetween the government and the multinationals and also helps the governmentto keep a tab on the activities of the oil and gas sector. The NNPC alsoparticipates in joint venture agreements with these multinational oil companiesand has sixty percent interests in the joint venture agreements.1.2 The Nigerian Oil IndustryThe Nigeria is the second largest producer of crude oil in Africa and isblessed with abundant natural gas reserves. as at 2006 Nigeria was thelargest oil producer in Africa and the sixthlargest in the world, averaging 2.7 million barrels per day (bbl/d) with9 Akinjide&co Nigeria: A Guide To The Nigerian Energy Sector – Oil
    • proven oil reserves at 35.2 billion barrels10. In February 2007, the thenstate minister for petroleum Dr. Edmund Daukoru put Nigerias proven oilreserves at about 35 bn barrels, a major increase from 5 bn barrels in199911.The growth of the Nigerian oil industry has been stunted by thepersistent Niger Delta crises forcing the shutdown of major oil stations inNiger Delta area. Their tactical asymmetrical warfare has beendetrimental to the growth of the oil industry and this will continue beingthe case unless an agreement is made. As of April 2007, an estimated587,000 bbl/d of crude production is shut-in. The majority of shut-inproduction is located onshore in the Niger Delta, with the exception of theoffshore 115,000 bbl/d EA Platform. Since December 2005, Nigeria haslost an estimated 16 billion dollars in export revenues due to shut-in oilproduction. Shell has incurred the majority of shut-in oil production(477,000 bbl/d), followed by Chevron (70,000 bbl/d) and Agip (40,000bbl/d). Militant attacks on oil infrastructure have also crippled Nigeria’sdomestic refining capabilities. In February 2006, militant attacks in thewestern delta region forced the Warri (125,000 bbl/d) and Kaduna(110,000 bbl/d) refineries to shutdown due to a lack of feedstock. InDecember 2006, operators shutdown Nigeria’s two Port Harcourt refineriesfor two months due to technical problems. The Niger Delta rebel group,Movement for the Emancipation of the Niger Delta (MEND) and othermilitia organizations in search of monetary compensation and/or politicalleverage are the ones behind the attacks. In addition to abductions,thousands of foreign workers and their families have left the Niger Delta10 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 privatedrilling company and pipeline laying company have also left. MEND hasstipulated numerous conditions to the Nigerian government that it wantsmet or else it has vowed to continue the attacks. Chief among theconditions is greater revenue sharing of the oil wealth, increased localcontrol of oil property, the release of tribal prisoners, and transparency ofgovernment budgets. International oil companies (IOCs) are not expectedto repair damaged oil infrastructure until after the elections are over12. Asa result of these conflicts, Nigeria’s production rate is on a constantdecline and according to statistics; the situation has shown little or no signof improvement. Production at Nigerias oil facilities may have continuedto drop drastically, owing to increasing tension in the oil-producing region,Niger Delta. Leaving no respite for smooth operation, the act of militancyin the region has halted several production activities, which had resultedin shut-in of about 25 per cent of the nations oil production capacity of2.6 million barrels per day (bpd).The production, which stood at 1.88million barrels per day as at mid January, may have dipped further withcurrent shut-in from major oil facilities in the Niger Delta. The latest, beingthe force majeure declared by Shell at its Bonny oil terminal, leaving itsproductions at 90,000 bpd, from the normal level of 500,000bpd.TheGuardian gathered that before the Shells pronouncement, shut-ins due tomilitant attack stood at 40,000bpd.Besides the militant induced shut-in,Nigeria is compelled to comply with the automatic cut by the members ofthe Organisation of Petroleum Exporting Countries (OPEC) to support12 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 itsshare of the 2.2 million bpd OPEC output cut.13The table above represents Nigeria’s Oil Production from 1986-2006.Asharp decline is noticed in the last two years. This decline occurs due tothe ethnic unrest in the Niger Delta region. The persistent conflicts in theregion has affected Nigeria’s oil production rate drastically even up to thetime of this writing.1.2.1 Upstream SectorThis is the most important sector of the Nigerian oil industry as itaccounts for a huge chunk of Nigeria’s total export. Over theyears, the Nigerian government has concentrated more on this13 Salau S. Nigerias oil production dips further, as militants continue onslaught. The Guardian. Wednesday,February 18, 2009
    • sector. The production rate would have increased drastically ifnot of the violence in the Niger Delta region. The upstream sectorstill remains very important to the Government and this is largelydue to the fact that it constitutes a major proportion of Nigeria’sforeign exchange earnings. The Upstream activities in theNigerian oil and gas sector include;(i) Petroleum Exploration and Exploitation.(ii) Search for development of local substitute for such items asMedium pressure valve, pumps, shallow drilling equipment,Drilling mud, bits fittings, drilling cements etc.(iii) Manufacturing of consumable materials in exploration suchas explosives, detonators, steel castings, magnetic tapes etc.(iv) Other areas in the services sector of the upstream are:1. Construction and Installation2. Maintenance3. Pipelines4. Well Services and5. Transportation Support Services.141.2.1 Downstream Sector14 Retrieved 6th may 2009 from http:www.nigeriagalleria.com/investment
    • This sector deals with post production in the oil and gas sectorand includes refining and processing stages. Transportation is anintegral aspect of the downstream sector and pipelines are veryessential at this stage. Oil and gas pipelines come under theheading of transportation. From experience, the cheapest, mostconvenient and reliable means of transporting petroleum fromfield to a land destination within a reasonable distance is throughpipelines.15Downstream activities majorly include;(i) Domestic Production and marketing of Liquefied PetroleumGas (LPG)(ii) Manufacturing of LPG cylinders, valves and regulators,installation of filing plants, Retail distribution and development ofsimple, flexible and much less expensive gas burner toencourage 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 andgrease.- The manufacture of bituminous based water/damp-proofbuilding materials such as roofing sheets, floor tiles, rubberproducts, tarpaulin. Building of asphalt storage, packaging andblending plants to handle the product for export.15 See Etikerense pp 85
    • (iv) Establishment of chemical industries such as distillation unitsfor the production of naphtha and other special boiling pointsolvents used in plant and other food processing industries.(v) Establishment of industries for processing Linear AlkylBenzene, Carbon Black and Polypropylene.(vi) Development of Phase II (Phase III to join later) of Nigeria’sPetrochemical Programmed.(vii) Participation in all phases of the Nigeria Gas Industrydevelopment programmed from exploration, gathering,production and processing to transmission.(viii) Establishment of small scale industries to produce chemicalsand Solvents, for example Chlorinated methane, Formaldehyde,Acetylene, etc., from natural gas.(ix) Refining: One condition for purchasing Nigerian Crude Oil isthe ownership of an efficient refinery. The shelter which thedomestic petroleum products market enjoys, almost completelyseals the prospects and viability of privately financed refinery forlocally consumed petroleum products. However, opportunitiesexist for the construction of a refinery in bonded premises withadequate export facilities for dedication to the export market.(x) Products Marketing: Petroleum Product Marketing would seemsealed with hardly any opportunity except by way of establishing
    • an independent marketing outfit or aspiring to establishdealership with the marketers.The nation’s pipeline and depot network consists of 3,001km ofpipeline of varying sizes as well as sixteen (16) storage depots.These pipelines and networks traverse the length and breathe ofthe country. The system therefore must be maintained in ahealthy state for effective and efficient distribution of products.161.3 Niger-Delta: The Area and the PeopleNigerias oil is mainly produced from the Niger Delta area, eighty per cent ofwhich is located in Delta, Rivers and Bayelsa states. These three states produce75% of the nation’s petroleum. Other states within which the Delta is situatedare Edo, Cross River, Akwa Ibom and Ondo States. The Delta covers over 20,000square kilometres, and is one of the largest deltas in the world. The people of theNiger Delta are primarily from the minority tribes of Nigeria and are very poor.They lack modern infrastructure and live under poor health conditions.17TheNiger delta region is predominantly composed of people living in poverty. It is aregion which produces most of Nigeria’s petroleum which is her Nigeria’s chiefsource of income.1.3.1 Geographical Definition of the Niger DeltaNiger Delta covers all the land between latitude 4o151N and 4o501N andlongitude 5o251E and 7o371E with a total area of 20,000km2.The Niger Delta, asnow defined officially by the Nigerian Government, extends over about 70,000km² and makes up 7.5% of Nigeria’s land mass. Historically and cartographically,16 Retrieved 6th may 2009 from http:www.nigeriagalleria.com/investment17 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, Obansanjos regime expanded its definition to include Abia State, AkwaIbom State, Cross River State, Edo State, Imo State and Ondo State. Some 31million 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 isknown to be one of the largest deltas in the world.1.3.2 Biological Diversity of the Niger DeltaThe Niger Delta is a region blessed with abundant flora and fauna. The NigerRiver is an important ecosystem that needs to be protected, for it is home to 36families and nearly 250 species of fish, of which 20 are endemic, meaning theyare found nowhere else on Earth. Our constant exploration for oil has beendetrimental to the flora and fauna in this region. There is a gradual depletion ofthis ecosystem and these species are fast becoming extinct. The rich flora andfauna of the area supplied the immediate source of livelihood for the people ofthe region for many generations. For so long the people lived in harmony, andthere was evident balance in the ecosystem.The Niger Delta region is characterised by wetlands and water bodies with creeksand rivers criss-crossing the entire southern parts. However the region isendowed with enormous natural resources. The region one of the worlds largestmangrove forest with the most extensive freshwater swamp forests and tropicalrain forests characterised by great biological diversity. Some of the morecommon tree species in this region include; Lophira alata, Pycnanthusangolensis, Ricinodendron heudelotii, Sacoglottis gabonensis, Uapaca spp.,Hallea ledermannii, Albizia adianthifolia, Irvingia gabonensis, Klainedoxa18 United Nations Framework Convention on Climate Change." UNFCC. Nov. 2003.
    • gabonensis, Treculia africana, and Ficus vogeliana. The oil palm (Elaeisguineensis) is common, and the understory is often dominated by rattans (e.g.Calamus deerratus). The second zone is the eastern delta flank, which isshrinking relative to the western flank. Some lowland forest non-swamp speciesare found here (e.g. Ogilbys Duiker Cephalophus ogilbyi and Sclaters GuenonCercopithecus sclateri). The third zone is the central backswamp area of thedelta, crossed by old creek levees. This area is not often flooded and is notinfluenced by the tides, and hence relatively stable. Most of the forest here isalways waterlogged. The only systematically collected data for the Niger Deltasvegetation comes from this zone. The distribution of tree species in the forest isdetermined by hydrology with drier remnants of levees being more diverse thanthe waterlogged back swamps. The forest is dominated by the following treespecies: Euphorbiaceae (Uapaca spp., Klaineanthus gaboniae, Anthostemaaubreyanum, Macaranga spp.) Annonaceae (Xylopia spp., Hexalobus crispiflorus)Guttiferae (Symphonia globulifera, Pentadesma buteraceae), Rubiaceae (Hallealedermannii, Rothmannia spp.), Myristicaceae (Coelocaryon preussii, Pycnanthusmarchalianus), and Ctenolophonaceae (Ctenolophon englerianus).191.3.3 Ethnic Composition of the Niger Delta: The Niger delta region is composed of diverse ethnic groups withdifferent cultures. Hence, ethnic conflict is a major source of thecurrent unrest in the region. Over the years there has been a range ofcontradictory opinions as to the ethnic groups which compose theNiger delta. While many perceive the Niger delta to be synonymouswith oil producing areas, others define the region in terms of itsethnography. ‘The 1958 Nigerian Constitutional provision for the NigerDelta 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 andaddress the development needs of the peculiar terrain of the NigerDelta, before granting independence to Nigeria, the British Governmentproposed that the Niger Delta be declared a Special Federal Territory.Linguistically, ethnographically and culturally, the Niger Delta of thepre-crude oil and gas era comprised a bewildering mix of ethnicgroups. Among these, the communities of the Ijaw (in Eastern andWestern), the Ogoni, Itsekiri, Urhobo, Isoko, Ikwerre and Delta Igbo hitmore headlines than others did. These are the several communities inthe present-day Rivers, Bayelsa and Delta States as well as part ofOndo State. Misconceptions concerning the correct focus of the NigerDelta made more controversial, more complex and politically incorrectpublic debates on effective answers to the vexatious questionsinvolved. For example, while presenting the Niger Delta DevelopmentCommission (NDDC) Bill to the Senate, President Olusegun Obasanjoincluded Ondo, Imo, Abia and Edo States. Furthermore, Governors ofvarious states as far as Anambra were jostling for inclusion in the NigerDelta.2020 Retrieved April 7th 2009 from http://www.earthrights.net/nigeria/news/definition.html