THE DEVELOPMENT OF PEROLEUM IN NIGERIA

THE HISTORY OF NIGERIAN CRUDE OIL

 INTRODUCTION

 

What is Crude Oil

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a non-renewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

History of Crude Oil Usage in Nigeria

Nigeria is known to be a country blessed by God for their useful resources.  The history of crude oil can be traced back to the time of our colonial masters. And the time of “Olobiri Oilfeld”

The discovery of “Olobiri Oilfield”

Oloibiri Oilfield was discovered on Sunday 15 January 1956 by Shell Darcy. It was the first commercial oil discovery in Nigeria; this discovery ended 50 years of unsuccessful oil exploration in the country by various international oil companies and launched Nigeria into the limelight of the Petro-State.

Following the discovery of oil in commercial quantities in Oloibiri, Shell stepped up exploration in the Niger Delta and By 1958 Shell Darcy had discovered oil in twelve areas in the Niger Delta of which Oloibiri, Afam and Bomu were the most promising.

The discovery well Oloibiri −1 was spudded on 3 August 1955 and drilled vertical to a total depth of 12008 feet (3660m). The well was tested and it flowed at the rate of about 5,000 barrels (790 m³) of oil per day and it was deemed to be a commercial discovery. Some gas was also discovered with the oil. The oil discovery was made in the Tertiary Agbada.

APPRAISAL AND THE DEVELOPMENT OF THE FIELD

Between 26 June 1956 and 28 October 1958, 11 appraisal wells were drilled vertical to appraisal the extension of the reservoir to different sections of the field. The first appraisal well was Oloibiri-2, it was spudded on 26 June 1956 and drilled vertically to a total depth of 2932m and it encountered oil in the Agbada Formation. Six of these appraisal wells were a success and encountered oil pay.

An appraisal well Oloibiri-17 was spudded on 9 June 1967 after 9 years of production and drilled deviated to a measured depth of 12520 feet (3816 mD) but the result was not encouraging. Oloibiri-17 was plugged and abandoned. The field production was on depletion from its peak production and the well was drilled to appraisal another section of the field so as to increase production.

Another appraisal well Oloibiri-18 was spudded on 21 April 1979 and drilled to a vertical depth of 9616 feet (2931 m) but the result was also discouraging. The field was almost depleted at that time. The main objective of the Oloibiri-18 was to appraise a new section and improve the drainage of the reservoir but the well was dry with shows and so it was plugged and abandoned.

Following the successful completion of the appraisal of the field, four development wells were drilled in 1958 (between 17 June 1958 and 27 November 1958) for the development of the field. The four development wells and the six successful appraisal wells were completed as oil production wells.

The discovery well, Oloibiri-1 was completed on 5 June 1956 as a commercial oil production well. Thus, Oloibiri-1 made history as the first truly commercial oil well in Nigeria. This brings the number of completed production wells on field to eleven.

Although fossil fuels like coal have been harvested in one way or another for centuries, crude oil was first discovered and developed during the Industrial Revolution, and it's industrial uses were first developed in the 19th century. Newly invented machines revolutionized the way we do work, and they depended on these resources to run. Today, the world's economy is largely dependent on fossil fuels such as crude oil, and the demand for these resources often spark political unrest, since a small number of countries control the largest reservoirs. Like any industry, supply and demand heavily affects the prices and profitability of crude oil. The United States, Saudi Arabia, and Russia are the leading producers of oil in the world.

The Organization of Petroleum Exporting Countries (OPEC), which consists of the worlds largest producers of crude oil by volume, used to be the most influential oil producers in the world, and as such, they had a lot of economic leverage in determining supply and therefore oil prices. In the late 19th and early 20th centuries, however, the United States was one of the world's leading oil producers, and U.S. companies developed the technology to make oil into useful products like gasoline. During the middle and last decades of the century, U.S. oil production fell dramatically, and the U.S. became an energy importer. In the early 21st century, the development of new technology, particularly hydro-fracturing, has created a second U.S. energy boom, largely decreasing the importance and influence of OPEC.

Oil is a major source of energy in Nigeria and the world in general. Oil being the mainstay of the Nigerian economy plays a vital role in shaping the economic and political destiny of the country. Although Nigeria’s oil industry was founded at the beginning of the century, it was not until the end of the Nigeria civil war (1967 - 1970) that the oil industry began to play a prominent role in the economic life of the country.

Nigeria can be categorized as a country that is primarily rural, which depends on primary product exports (especially oil products). Since the attainment of independence in 1960 it has experienced ethnic, regional and religious tensions, magnified by the significant disparities in economic, educational and environmental development in the south and the north. These could be partly attributed to the major discovery of oil in the country which affects and is affected by economic and social components.

Crude oil discovery has had certain impacts on the Nigeria economy both positively and adversely. On the negative side, this can be considered with respect to the surrounding communities within which the oil wells are exploited. Some of these communities still suffer environmental degradation, which leads to deprivation of means of livelihood and other economic and social factors. Although large proceeds are obtained from the domestic sales and export of petroleum products, its effect on the growth of the Nigerian economy as regards returns and productivity is still questionable.

ADVERSE EFFECTS OF RELIANCE ON OIL

Heavy reliance on fossil fuels is cited as one of the main causes of global warming, a topic that has gained traction in the past twenty years. Risks surrounding oil drilling include oil spills and ocean acidification, which damage the ecosystem. Many manufacturers have begun creating products that rely on alternative sources of energy, such as cars run by electricity, homes powered by solar panels, and communities powered by wind turbines.

A picture showing Olobiri Oil Wells

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Fig. 3

REFERENCES

Chuks Onyems, Nigeria Oilfields Encyclopedia.

         HIST Reconnaissance History in Africa, Vol. 30, pp. 133-156.

Gujarati, D.N. (1995). Basic Econometric. (3^rd Ed.) (New York: McGraw-Hill, Inc).

Madujibeya, S. A. (July 1976), “Oil and Nigeria's Economic Development”, African Affairs,     Vol. 75, No. 300, pp. 284-316.

NNPC, (April-June, 1981), Necector (House Journal), Vol.2, No.2 p.18

Odell P.R. (Jul., 1968) The Significance of Oil Journal of Contemporary History, Vol. 3, No. 3, The Middle East. pp. 93-110.

History of the Nigerian Petroleum Industry