Friday, August 19, 2011

Oil and Nigeria (Part 1)

Oil was first discovered at Oloibiri in 1958 in commercial quantities after several exploration efforts which began way back in 1908. Then it was as if the heavens had suddenly smiled down on us; our turn to shine had come and nothing was going to stop us. But looking back over 54 years of oil rigging and exporting in Nigeria we begin to wonder: Where are all the schools that the oil money ought to have built? How come our roads look fairly the same, I thought the oil money was supposed to take care of that! How come our per capita income is not so far away from where we left it at independence? What of the oil-producing states I mean since the oil is located in their terrain one would expect them to have become mega-cities by now, what happened? All of the dreams and hopes that had suddenly become ours with the discovery of oil have over the years eluded us. In the following sections, I'll just do a casual analysis of oil in Nigeria and what it has meant to us.
The Rise of Oil
Back in secondary school, I chose History as one of my elective subjects and in our history classes we were always talking about the rise of this leader or that empire : The rise of Ibn Khaldum, the rise of Shaka de Zulu, the rise of the Kanem Borno empire and so on and so forth. So also the discovery of oil in 1956 and the turnout of events in the years following paved the way for "The Rise of Oil"
Actual oil production began in Oloibiri in 1958 with an initial production rate of 5100 barrels of crude oil per day, and then in 1972 production rate climbed to 2.0 million barrels per day and eventually in 1979 oil production peaked at 2.4 million barrels per day. From 1965-1975, the nation's annual revenue witnessed a tremendous increase from $295 million to $2.5 billion with much of the increase coming from oil. Because of this tremendous increase we took the easy way out focusing all of our energies on the exploration of our bountiful oil reserves and its attendant benefits; thus neglecting other sectors of the economy especially the agricultural sector, as oil revenues increased, agricultural production and revenue plummeted. From 1970-1982 around the time of the oil boom production of groundnuts fell by 64%, Cocoa 43%, Rubber 29% and Cotton by 65%. Oil came on the scene took center stage and knocked every other "performer" off the scene. Today statistics tell us that about 80% of our revenues are obtained from crude oil; it makes you wonder if "the oil empire" collapses (like the kanem borno empire collapsed) what would happen to we who are so intimately attached to it.
P.S. To be continued....

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