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WILL OIL FLOW FOREVER IN NIGERIA
WILL OIL FLOW FOREVER IN NIGERIA

WILL OIL FLOW FOREVER IN NIGERIA?.

At the period of her independence, Nigeria economy was basically diversified. Agriculture contributed over sixty percent (60%) of the foreign exchange earnings. There were (and still are) other mineral resources like coal, limestone, zinc, iron ore, tin ore, rubber, cocoa and so on, that were harnessed and contributed to the growth of the nation’s economy. In the eastern part of Nigeria, precisely Enugu there was (and almost certainly is) a commercial quantity of coal, which was mine and served domestic needs of the country and almost exported to other countries of the world. The large scale quantity of limestone at Nkalagu motivated the establishment of the Nigeria Cement factory (NIGERCEM) Nkalagu. Commercial quantities of palm produce were also available in Imo state which saw the establishment of the ADAPALM palm oil factory in Imo state. In the Northern part, there was an intensive cultivation and exportation of groundnut as made evident in the famous groundnut pyramids in Kano. In the west and south, there was a large scale cultivation and exportation of cocoa and cotton. In all the various agricultural and mineral resources with which Nigeria was blessed were altogether put into proper utilization for an economic growth and prosperity. The result was a reasonably robust economy, a stable currency with high purchasing power, little or no inflation, low crime rate, high rate of discipline and patriotism. This trend was however truncated by the now popular era of oil boom which began in seventies.

BOOM OF CRUDE OIL EXPLORATION IN NIGERIA.

It is pertinent to recall that crude oil was first discovered in Nigeria in 1956 at Olobiri in Niger Delta region after about half a century of exploration. The discovery was made by SHELL-BP, which was that time the sole concessionaire (that is the only firm that engaged in crude oil exploration in Nigeria). Nigeria thus joined the rank of oil producers in 1958 when her first oil field came on stream, producing 5,100 barrels per day (bpd). After 1960 exploration lights in onshore and offshore area adjoining the Niger Delta were extended to other foreign companies. In 1970, at which at the end of the Biafran war, there was a rise in the world oil price and Nigeria reaped instant riches from oil production. Consequently, she joined the Organization of the petroleum export countries (OPEC) in 1971 and thus established the Nigeria National Petroleum Cooperation (NNPC) in 1977, which became a major player in the nation’s upstream and downstream oil sectors. Nigeria is reputably the largest oil producer in Africa and eleventh largest in the whole world, with an average production quota of 2.5 million barrels per day (bpd) in 2004. In August 2004, Nigeria announces plans to produce 2.6 million bpd in 2006 and 4 million bpd in 2010. In January 2005, Nigeria earned a total of US$ 2.6 billion, an equivalent of N345.8billion from the sale of crude oil alone. This is at an average of US$ 46.86 per barrel and with an estimate daily sale of 1.79 million barrels. International oil companies have always seen Nigeria as an attractive and conducive area for upstream (oil exploration) investment. Oil exploration has take place in five major sedimentary basins, namely: The Niger Delta, The Anambra river basin, The Benue trough, The Chad Basin and the Benin Basin. The most prospective basin however is the Niger Delta, which make up most proven and possible (oil) reserves. Thus all oil production to date has occurred in this basin (That is the Niger Delta Basin). As it were, following the afro mentioned conditions; crude oil exploration presently provides more than ninety percent of Nigeria’s export earnings. This becomes a major reverse from the initial situation when Agriculture provides more than sixty percent of the nation’s earnings and there was exportation of other minerals. The present situation has created a condition where agriculture and the development of other solid minerals have been unduly relegated to the background, the oil sector has dominated the nation’s economy, while this write up does not advocate a return to a solely agricultural based economy, it rather make a case for a balance in the development of all sectors of the economy, including the oil and gas, agricultural, tourism, transport, power, sports and so on.

OIL BOOM AND DIVERSIFICATION OF THE ECONOMY. No doubt, the discovery of crude oil in Nigeria was supposed to be a blessing to this nation. Obviously, just as was indicated initially in this write up, Nigeria has earned huge foreign exchange from her crude oil exports. The over all euphoria associated with the exploration, discovery, drilling, exportation and huge financial income accruing from the sale of oil has come to be described in many quarters as the oil boom. It is pertinent to remark that other sectors of the nation’s economy have suffered undue neglect due to the emphasis on crude oil. It is also note worthy to remark that the undue attention on crude oil is one of the greatest factors that breed corruption, redundancy and lack of productivity. This is because most Nigerians, including her political leaders have developed the attitude of “going to squander oil money” which they believed to be inexhaustible. Thus, those who find themselves in position of authority use their position and opportunity to siphon public fund into private coffers. There is need to make all sectors of the economy functional for the growth of this nation and this move will no doubt accelerate the pace of development of the nation and truly enable the nation to occupy a pride of place within the comity of nations. There is no doubt that oil has been and still the main stem and hope of Nigeria because whenever there is hike in price of petroleum products, wow, you can see that magically, instantly, immediately and automatically thing will begin to grow harder and harder day by day. But yet, there is a need for every average Nigerian especially our Leaders both current and past and stake holders, the clergy and non-clergy, traditional rulers and every body to sit down and answer this weighty question “WILL OIL FLOW FOREVER IN NIGERIA?” It will be an unforgettable catastrophe if we rise up tomorrow as usual and found our oil well or hope dried up and what will be our fate? To this end, the solid mineral development ministry, the Nigeria export promotion council and the federal government and state governments, the National assembles and all stake holders in the determination of the welfare of the nation’s economy should as a matter of urgency and necessity put hands together to create a blueprint that ensure full and well strengthened economy. This will no doubt be for the overall good of Nigeria nation. A stitch in time saves nine. Insert non-formatted text here