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Discovery of Crude Oil in Nigeria; A Blessing or a Curse
- 1. Bolawa Fadojutimi CRUDE OIL IN NIGERIA; A Blessing or a Curse Northwestern University, Capstone Presentation Masters in Project Management May 2012
- 2. CONTENT •NIGERIA •BACKGROUND INFORMATION •HISTORY OF OIL IN NIGERIA •IMPACTS OF THE OIL INDUSTRY •ECONOMY •ENVIRONMENT •PEOPLE •AGRICULTURE •FUTURE OUTLOOK • CONCLUSION
- 3. NIGERIA – BACKGROUND INFORMATION
- 4. NIGERIA – BACKGROUND INFORMATION LOCATION Western Africa POPULATION 170million (7th largest in the world) CLIMATE Tropical Region RESOURCES Natural 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
- 5. HISTORY OF OIL IN NIGERIA
- 6. OIL IN NIGERIA - HISTORY 1908 Exploration commenced 1914 Brought to an abrupt end by WW I 1937 Resumed by Anglo - Dutch consortium 1947 Brought to an abrupt end by WW II 1956 Commercial discovery in the Niger Delta (5100bpd) CIVIL WAR 1967 - 1970 •Oil production grossly affected •Irregularities in sharing formula •Ethnic clashes, 2,000,000 lives lost
- 7. OIL IN NIGERIA - HISTORY OIL BOOM 70’s Kaduna Refinery •Enormous wealth creation •Other sectors took the backseat •Refineries built in 1978, 1980 and 1989
- 8. OIL IN NIGERIA - PRODUCTION 6th Largest producer of oil in the world Produce 2.46m barrels of oil per day Import 33m liters per day
- 9. OIL IN NIGERIA •Job creation through the sector In 2011 90% Foreign earnings 40% GDP contribution
- 10. IMPACTS OF THE OIL INDUSTRY
- 11. ECONOMY – BACKGROUND INFORMATION •Highly dependent on the agricultural sector up until the 70’s REVENUE CONTRIBUTION 4.1% I 5.9 % 64% 1963 - 1964 1970 – 1985
- 12. ECONOMY SECTOR CONTRIBUTION TO GDP 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% •Economic policies have been centered around oil sector Minister of Finance, Dr (Mrs.) Ngozi Okonjo-Iweala, “…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…”
- 13. ECONOMY EARNED AND PROJECTED VALUE OF EXPORTS EARNINGS •2010 – US$ 65.073 billion •2011 –US$ - 87.92 billion
- 14. ECONOMY BLESSING •Giant of Africa •Staggering revenues •Access to international loans CURSE •Collapse of infrastructure •Lack of evident development •21% unemployment rate •70% of population below poverty line
- 15. ENVIRONMENT – BACKGROUND INFORMATION NIGER DELTA REGION 70,000km2, 800 communities Freshwater swamp forests Mangrove forest Lowland rainforests Barrier island forests 60-80% of all Nigerian plant and animal species Non renewable resources Natural gas, Fossil fuels, and Construction materials Renewable resources Timber, Vegetables, Fruits, Nuts and Seeds and Medicinal plants
- 16. 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
- 17. ENVIRONMENT - OIL SPILLAGE STATISTICS
- 18. ENVIRONMENT - OIL SPILLAGE In 2011, SPDC reported Oil spillages of 1.68m gallons of oil •Spread over 356 square miles •Worst oil spill in the region in the last decade •Arguments over figures released
- 19. ENVIRONMENT - RESTORATION UNITED NATIONS ENVIRONMENTAL PROGRAMME 2011 ASSESSMENT Environmental Restoration 30years, $1bn for first 5years CURSE •Extreme levels of pollution •Arable land heavily contaminated •Drinking water contains pollutants
- 20. 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
- 21. 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
- 22. AGRICULTURE – BACKGROUND INFORMATION In the 60’s met 95% of nations food needs 64.1% GDP contribution •Major revenue generator 1914 – 1970’s •Employed a large percentage of the population Current Situation •Less than 50% of arable land cultivated •Small scale, using age old methods •Employs 70% of population
- 23. AGRICULTURE In 2011 $4bn Importation on food 35.4% GDP contribution 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
- 24. AGRICULTURE – SECTOR REVITILIZATION TARGETS AND ASPIRATIONS VISION 2020 & MILLENIUM DEVELOPMENT GOALS 2015 partnering •Ensuring local food needs are met •Major exporter of foodstuffs •Boost the sector
- 25. AGRICULTURE CURSE •4.6% allocation in federal budget •Economic policies don’t support sector •Loss of arable lands to exploration activities
- 26. FUTURE OUTLOOK
- 27. FUTURE OUTLOOK
- 28. CONCLUSION •DECENTRALIZATION OF ECONOMY •REVAMPING •IMPLEMENTATION OF ALL SECTORS OF GOALS •GOVERNMENT ACCOUNTABILITY
- 29. THANK YOU Q&A