AN OVERVIEW OF THE OIL & GAS INDUSTRY IN NIGERIA AND THE PETROLEUM INDUSTRY BILL (I)
By Suraj ‘Jarus’ Oyewale, ACA
Tax Accountant @ an Oil & Gas Company
Founder, JarusHub Career & Management Portal
Being a paper presented at the 1st Public Discussion Forum organized by the Economic Insight, the press arm of the Economics Students Association of the Obafemi Awolowo University, Ile-Ife, Nigeria
Saturday, March 29, 2014
THEME: THE NIGERIAN PETROLEUM INDUSTRY BILL (PIB): FRAMEWORK FOR ECONOMIC EMANCIPATION OR POLITY DESTABILIZATION?
INTRODUCTION
I will like to start by commending my respected lecturers present. The students have also impressed me by trooping out on a Saturday to attend this intellectual forum. The organizers of this event have done a very good job as well and I believe such a creative forum will be sustained by the future executives.
My weekends are usually special to me, because those are the days I spend on my personal stuff, as my Mondays to Fridays are taken by my 8-5 job. In recent times, I had turned down speaking invites from students and other volunteer groups from Abeokuta to Ogbomoso, for no other reason than I’m not a big fan of intercity road travel in Nigeria. But when I received this invitation from the Editor-in-chief of Economic Insight, it was difficult for me to reject. Ife is just too special for me that I was ready to forgo every other activity for the weekend for.
I left this university some eight years ago and I have never hesitated to tell anybody that cares to listen that the best phase of my life was my time in Ife. I have published in several national dailies and online media, articles bordering on this university. I have suggested ways of moving our institution forward and I am happy with the changes I have seen since I came here.
This discussion forum is organized by Economic Insight, the press arm of the Economics Students Association of this university. Interestingly, I am an alumnus of Economic insight. I joined in my year one and I was a member till I graduated. I was one of the most consistent writers for the agency’s press board.
I always tell my junior ones that what makes Ife tick is not only what you learn in classes, but what you learn off-classes. Every interaction, from formal to informal, from the arguments in the rooms to the analyses at the Student Union Building, has a way of enhancing intellectual development. Formal programmes like this even do more. This is why you have to commend the organizers of this programme.
Today, in addition to my job as an accountant in an oil company, I contribute to burning issues by way of writing. I did not learn that in class. The Economic Insight editorial outfit provided a veritable platform for me to sharpen that skill while in Ife. Today, eight years after, I still write at least two standard articles every week.
Now, let us go to the business of the day: The Petroleum Industry Bill – Framework for Economic Emancipation or Polity Destabilization?
Can I start by asking any student here to tell me what a bill is?
A bill is a draft of a proposed law that is still undergoing legislative scrutiny. When it is passed by the National Assembly, it becomes an Act. I don’t think any other bill has been more controversial in Nigeria since our return to civil rule in 1999 than the PIB. Perhaps the Freedom of Information Bill came close. Well, like I said in one of my articles on PIB, the reason why PIB is so contentious is not far-fetched: anything petroleum in Nigeria generates passionate interest. That is where the money is, isn’t it?
Now, before I go into full discussion on PIB, let me give a brief background into the history of petroleum and an overview of the oil and gas industry in Nigeria.
PETROLEUM RESOURCES – A HISTORY
I am an accountant and an economist, and not a technical person (chemical engineer, geologist, geo-physicist, etc), so you will have to pardon me if I am not able to break this down further.
Petroleum is a naturally occurring liquid, consisting of a complex mixture of hydrocarbon and other organic compounds, formed from the fossilized remains of dead plants and animals by exposure to heat and pressure in the Earth’s crusts over hundreds of millions of years.
Petroleum has been around for long, although usually used in unrefined form hundreds of years back. As far back as 8th century, some one thousand and three hundred years ago, the streets of Baghdad were reportedly tarred with substance derived from petroleum!
According to an historian K. Ajram, in his book, The Miracle of Islamic Science (1992), oil fields were exploited in what is today Azerbaijan, far back 9th century.
Kerosene lamp was invented some seven hundred years ago. (ZaynBilkadi, University of California, Berkeley “The Oil Weapons”).You all know kerosene is a product of petroleum.
Nearly 200 small refineries operated in the suburbs of Baku by 1884. The first modern oil refineries were built in Poland from 1854–56 (Frank, Alison Fleig (2005). Oil Empire: Visions of Prosperity in Austrian Galicia (Harvard Historical Studies, Harvard University Press). The refined products were used in artificial asphalt, machine oil and lubricants.
The first large oil refinery opened at Ploiesti, Romania in 1856. Oil drilling in the United States began in 1859, in Titisville, Pennsylvania. However, by the first quarter of the 20th century, the United States overtook Russia as the world’s largest oil producer.
The Superior Oil Company (now part of Exxon Mobil) built the first offshore oil platform off the Gulf Coast of Louisiana in 1938.
By the end of Word War II, the Middle East had gained ascendancy in Oil production.
LOOKING BACK: TIMELINE OF PETROLEUM INDUSTRY MILESTONES IN NIGERIA
- 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
- 1958 – First shipment of oil from Nigeria.
- 1961- Texaco Overseas started operations in Nigeria.
- 1962 – Elf started operations in Nigeria. (As Safrap) -Nigeria Agip Oil Company started operations in Nigeria
- 1965 – Phillips Oil Company started operations in today’s Delta State
- 1968 – Mobil Producing Nigeria Limited) was formed. 1970 – The Department of Petroleum Resources Inspectorate started.
Continues in part 2
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