1.1 BACKGROUND OF
The search for oil deposit started in Nigeria, in 1908 by
the Nigerian Bitumen Corporation but was interrupted by the outbreak of the
first world war in 1914. Exploration again resumed in 1937 and the first well
was drilled by Shell D’Arcy in 1938.
Also their activities were interrupted by the Second World War in 1939
but resumed in 1947. In 1955, Mobil
Exploration Incorporated received concession over the former Northern region of
Nigeria, where the company carried out relevant geological surveys and also
drilled some wells in the Western part of Nigeria. But before abandoning its concession in 1961,
other Companies such as Gulf, Agip, Safrap (now Elf), Teneco and Amoseas (Now
Texaco and Chevron) had also began exploration activities for oil in the
on-shore and off-shore areas of Nigeria.
Although Shell discovered oil in commercial quantities in Nigeria in
1956, at Oloibiri in the Niger Delta region and began production of the
commodity in 1958, the “concessionary
rights” which had formally been granted to Shell alone was extended to the new oil companies, in time with the
government’s policy of increasing the place of exploration in the country. Apart from the initial discovery of oil at
Oloibiri, further oil discoveries at Afam and Bomu, confirmed Nigeria’s status
as a major oil producing nation, (WRI, 1990).
Hence Nigeria joined the organization of “Petroleum Exporting countries
(OPEC)” in 1970 and later established the Nigerian National Petroleum Corporation
(NNPC) in 1971; a Federal Government owned controlled parastatal that operates
a joint venture (JV) agreement with trace in other foreign multi-national Oil
Companies in Nigeria to produce both the nation’s oil and gas. These oil industries have risen to the
commanding heights of the Nigerian economy, particularly in the past five
decades because it has brought unprecedented changes when it replaced
agriculture as the cornerstone of the nation’s economy. Although Nigeria can be categorized as a
country that is primarily rural which depends on petroleum production export,
surrounding communities within which oil wells are exploited still suffer
environmental degradation (Adenorti, 1996).