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The History of the Nigerian Petroleum Industry
« on: May 21, 2013, 05:46:09 PM »
Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. The discovery was made by Shell-BP, at the time the sole concessionaire. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. In 1965 the EA field was discovered by Shell in shallow water southeast of Warri.

In 1970, the end of the Biafran war coincided with the rise in the world oil price, and Nigeria was able to reap instant riches from its oil production. Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971 and established the Nigerian National Petroleum Company (NNPC) in 1977, a state owned and controlled company which is a major player in both the upstream and downstream sectors.

Following the discovery of crude oil by Shell D’Arcy Petroleum, pioneer production began in 1958 from the company’s oil field in Oloibiri in the Eastern Niger Delta. By the late sixties and early seventies, Nigeria had attained a production level of over 2 million barrels of crude oil a day. Although production figures dropped in the eighties due to economic slump, 2004 saw a total rejuvenation of oil production to a record level of 2.5 million barrels per day. Current development strategies are aimed at increasing production to 4million barrels per day by the year 2010.

Petroleum production and export play a dominant role in Nigeria's economy and account for about 90% of her gross earnings. This dominant role has pushed agriculture, the traditional mainstay of the economy, from the early fifties and sixties, to the background.

Major Events in the history of the Nigerian Oil and Gas
1908  Nigerian Bitumen Co. & British Colonial Petroleum commenced operations around Okitipupa.

1938  Shell D' Arcy granted Exploration license to prospect for oil throughout Nigeria.

1955  Mobil Oil Corporation started operations in Nigeria.

1956  First successful well drilled at Oloibiri by Shell D'Arcy

1956  Changed name to Shell-BP Petroleum Development Company of Nigeria Limited.

1958  First shipment of oil from Nigeria.

1961  Shell's Bonny Terminal was commissioned.
          Texaco Overseas started operations in Nigeria.

1962  Elf started operations in Nigeria. (As Safrap)
          Nigeria Agip Oil Company started operations in Nigeria

1963  Elf discovered Obagi field and Ubata gas field
          Gulf's first production

1965  Agip found its first oil at Ebocha
          Phillips Oil Company started operations in Bendel State

1966  Elf started production in Rivers State with 12,000 b/d

1967  Phillips drilled its first well (Dry) at Osari –I
          Phillips first oil discovery at Gilli-Gilli -I

1968  Mobil Producing Nigeria Limited) was formed.
          Gulf's Terminal at Escravos was commissioned

1970  Mobil started production from 4 wells at Idoho Field
          Agip started production
          Department of Petroleum Resources Inspectorate started.

1971  Shell's Forcados Terminal Commissioned
          Mobil's terminal at Qua Iboe commissioned

1973  First Participation Agreement; Federal Government acquires 35% shares in the Oil Companies
          Ashland started PSC with then NNOC (NNPC)
          Pan Ocean Corporation drilled its first discovery well at Ogharefe –I

1974  Second Participation Agreement, Federal Government increases equity to 55%.
          Elf formally changed its name from "Safrap"
          Ashland's first oil discovery at Ossu –I

1975  First Oil lifting from Brass Terminal by Agip
          DPR upgraded to Ministry of Petroleum Resources

1976  MPE renamed Ministry of Petroleum Resources (MPR)
          Pan Ocean commenced production via Shell-BP's pipeline at a rate of 10,800 b/d

1977  Government established Nigerian National Petroleum Corporation (NNPC) by Decree 33, (NNOC & MPR extinguished).

1979  Third Participation Agreement (throughout NNPC) increases equity to 60%
          Fourth Participation Agreement; BP's shareholding nationalised, leaving NNPC with 80% equity and Shell 20% in the joint Venture.
          Changed name to Shell Petroleum Development Company of Nigeria (SPDC)

1984  Agreement consolidating NNPC/Shel1 joint Venture.

1986  Signing of Memorandum of Understanding (MOU)

1989  Fifth Participation Agreement; (NNPC=60%, Shell = 30%, Elf=5%, Agip=5%).

1991  Signing of Memorandum of Understanding & joint Venture Operating Agreement (JOA)

1993  Production Sharing Contracts signed -SNEPCO
          Sixth Participation Agreement; (NNPC=55%, Shell=30%, Elf= 10%, Agip=5%).
          The coming on-stream of Elf's Odudu blend, offshore OML 100.

1995  SNEPCO starts drilling first Exploration well.
          NLNG's Final Investment Decision taken

1999  NLNG's First shipment of Gas out of Bonny Terminal.

2000  NPDC/NAOC Service Contract signed

2001  Production of Okono offshore field.

2002  New PSCs agreement signed.
          Liberalisation of the downstream oil sector.
          NNPC commences retail outlet scheme

Source:   NNPC website

Adewale Odubiyi
Owner, Nigeria Oil & Gas Forum

Nigeria Oil & Gas Forum

The History of the Nigerian Petroleum Industry
« on: May 21, 2013, 05:46:09 PM »


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