OIL AND NIGERIA'S ECONOMIC DEVELOPMENT

Abstract

OVER THE PAST fifteen years the Nigerian petroleum industry has grown by leaps and bounds. Both production and exports have increased enormously since commercial production began in 1958. For example, crude oil output increased from a mere 257,000 tonnes in 1958 to 112-8 million tonnes in 1974; while exports rose from 230,000 tonnes to 110 million tonnes during the same period (see Table 1, p. 313). At the same time crude oil reserves have increased significantly from a mere 17 million tonnes in 1958 to 4,800 million tonnes in 1974; while proved and probable reserves in fields already discovered are now of the order of 7,000 million tonnes. Besides crude oil huge reserves of natural gas, both associated and non-associated, have been discovered in Nigeria and these were estimated at about 45,000 billion cubic feet at the end of 1974.' What is more, the prospects of finding more reserves of crude oil and natural gas are good because only a relatively small proportion of the possible oilbearing strata in Nigeria-both onshore and offshore-has so far been investigated. In this respect, it is significant that over half of Nigeria's surface area of 357,000 square miles is covered by sedimentary basins where oil-bearing rocks are most likely to be found. These basins cover most of Eastern and Mid-Western Nigeria and extend northwards to the confluence of the Niger and Benue rivers. From there one arm of the basin extends in a north-easterly direction along the banks of the Benue River to the Chad Basin, while the other arm extends in a north-westerly direction, along the valleys of the Niger River, to Sokoto Province and beyond. Similar geological features also extend far into the continental shelf2. In a recent report to the British Government, the International Management and Engineering Group (IMEG) commented that 'offshore Niger Delta is regarded as one of the most prolific oil-producing prospects in the world, and the excellent quality of its crude and Nigeria's relative proximity to markets in Western Europe, North and South America, should ensure that it will continue to be a major area of offshore interest and activity'.3