The document discusses how crude oil in Nigeria has had both positive and negative economic, social, and environmental impacts. It has generated substantial revenues but also led to overdependence on oil, neglect of other sectors, pollution, and health issues. While oil brought initial prosperity, it has contributed to poverty, unemployment, and a lack of development in other areas despite Nigeria's significant oil wealth and status as a top oil producer. The future depends on diversifying the economy, supporting other sectors like agriculture, holding government accountable, and properly managing oil resources and revenues for the benefit of all Nigerians.
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Nigeria's oil industry: blessing or 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
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
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
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
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
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