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The Nigerian Crude Oil & Gas Industry (Reviewed, 10th May 2001) Tell your friends about this page! Email it to them.

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Brief Background

Nigeria's oil industry is dominated by the National Oil Company, Nigerian National Petroleum Corporation, NNPC founded in 1977. It is the major partner in the upstream joint ventures with the ‘seven sisters’ or major multinational petroleum exploration and production companies. These are the largest and oldest in Nigeria – Shell Petroleum Development company – SPDC or better known as "Shell" others are: Mobil Producing Nigeria unlimited, Chevron Nigeria, Elf Petroleum Nigeria and the Nigerian Agip Oil company, NAOC & Affiliate, Agip Energy and Natural Resources, AENR.

The NNPC owns an average 57 per cent in these JVS. Profits from the JVS are shared in the same ratio. For the NNPC/Shell JV: share structure: NNPC 55%, Royal Dutch/Shell 30%; Elf 10% and Agip 5%. Until early 90s, NNPC held 75% in the JV. It sold off 20 per cent. 10% sold to Shell, 10% to Elf and 5% to Agip.

Chevron JV: NNPC 60%; Chevron 40%

Mobil JV: NNPC 60%; Mobil 40%

NNPC Building, Abuja, NigeriaElf JV:NNPC 60%; Elf 40% (France) Nigerian Agip JV; NNPC 60%; Agip, (Italy) 40% Nigeria is regarded as mainly a gas province with some oil. Proven Gas reserves are put at 100 trillion cubic feet, TCF. Whereas proven oil reserves were 16 billion in1991 and 20 billion in 1992, Nigeria has set a target of 25 to 30 billion proven crude oil reserves for 2003.Nigeria has seven sedimentary basins: Niger Delta, deep offshore Niger Delta; Benue Trough; Lake Chad; Sokoto, Anambra, and Dahomey (Benin). Niger Delta is a mature oil basin and is considered to be one of the most prolific oil bearing sedimentary basins in the world.

Its adjunct deep offshore basin was opened for exploration in the 1991 (second) licensing round. A frontier area, the Niger delta deep offshore is proving to be just as prolific. A big gusher – Agbami oil field was found (1991) there. It holds 2 billion barrels of proven crude oil-in-place. Nigeria produces over 2 million barrels of crude oil per day. Condensate Production by Mobil accounts for another 50,000 barrels per day.

Most of Nigeria’s current natural gas production of about 100 million standard cubic feet/day occurs as associated gas, i.e. produced along with crude oil. Since the 1960s, and until recently, all of this associated natural gas was flared. But with the recent commissioning of Nigerian LNG, in Bonny, started in 1999, some of this associated gas is processed into LNG for export. With the completion of the NLNG’s third train expected in 2001, 60 per cent of currently flared gas would be converted to liquified natural gas.

Licensing Rounds

1st on February 26, 1970 the Nigerian government announced open bidding for 27 offshore acreages. 15 (OPLS) oil prospecting licenses were offered to: Niger petroleum company – Deminex (4) accidental (4) Japan Petroleum Co. (4) Nigeria oil Resources/Monsato (2) and Henry Stephens Westates 91). 12 OPLS remaining were reserved for the proposed Nigerian National Oil Co. NNOC, started in 1972, NNOC is the precursor of the present Nigerian National Petroleum Corporation, started in 1977.

The second licensing round was announced in 1991 when the then Babangida military regime offered 137 oil acreages for open, international competitive bidding. The acreages covered seven sedimentary basins – Niger Delta and its deep offshore, Benue Inland Trough; Anambra; Dahomey (Benin), Sokoto and Lake Chad.    

1. Niger Delta  2. Deep offshore (Niger Delta)* 3. Benue Trough
4. Dahomey 5. Sokoto 6. Lake Chad

*5-200 metres water depth


Nigerian Crude Types Specific Gravity Sulphur Content - (%)
Bonny light (sweet) 0.8398-37 api 0.14
Qua Iboe 0.8398-37 api 0.14
Escravos blend 0.8448-36 api 0.14
Brass river 0.8063-44 api 0.28
Forcados 0.8708-31 api 0.2
Pennington Anfan    

Concession winners were:

Alfred James Nig. Limited OPL 30 2 Benue Basin
Amalgamated oil OPL 452 Niger Delta
Atlas Petroleum OPL 75 Niger Delta
British Petroleum/Staboil OPLS 213; 217 & 218
Cavendish Petroleum

Many of the concession winners were indigenous oil prospectors. Most of the acreages won by them were concessions relinquished by the multi-national oil companies, for reasons due to low oil reserve or unwillingness to develop concession. Among the indigenous prospectors are Alfred James, owned by Oba Okunade Sijuawade, of Ife; Summit oil owned by now late Bashorun Moshood Abiola, Consolidated oil, owned by the us-based Nigerian multi-millionaire, Michael Adenuga Jnr.; Moncrief Oil, owned by Benin mulit-millionaire, Gabriel Igbinedion; Dubri oil owned by Iduimo Itsueli and Amni Petroleum.

The multinationals also came. Esso/Exxon staged a comeback, while statoil, the Norwegian state oil company made first foray in strategic alliance with BP, the British oil company; and Conoco, the oil division of Dupont corp. Abacan resources, the Canadian energy company worked with Amni International and Express Pet & Gas Company as technical and financial partner. Africa has over 360 oil fields accounts for 168. Sudan has about 300 million barrels reserves and there are smaller deposits in Central African Republic. Some oil finds are also reported in Niger, Chad and the Cameroon (Bakassi area).

NNPC Off Shore Oil RigIn 1991 estimated proven reserves of crude oil in Sub Saharan Africa was 21.7 billion barrels or 2.2 per cent of world reserves. About 79 per cent is located in Nigeria, while other notable oil provinces are in Angola and Gabon. By 1992, Nigeria had (7) seven sedimentary basins. 880 oil fields already discovered, whereas only 180 had been developed. In addition, there are several undeveloped marginal fields and large tar sand (bitumen) deposits, estimated at over 2 billion barrels oil equivalent in Ondo and Ogun States.

Refining and Distribution

Nigeria’s total installed refining capacity is 445,000 barrels per day of crude oil, as at 1990 to date. On paper 300,000 thousand barrels per day of crude is allocated to local refining and consumption. But on average about 240,000 bbl/day is given to the local refineries, up till the mid-90s. The breakdown of refineries and lack of TAM – turn-around – maintenance between 96-98 under late General Abacha's regime may have reduced local processing of crude oil to about 75,000 bbls/day. Refineries-Warri and Port Harcourt presently operate at 30% capacity. Kaduna refinery is still out, due to unsuccessful TAM, awarded to Total International in 1998.

In august 1976, NNPC begun an offshore crude processing scheme designed to complement local refining and reduce frequent product outages – Contractor’s to NNPC were: Shell Caracao; BP-Total consortium, Socap (elf) Stinnes, Interoil, Petrograd (brazil) Total international (France and Bermuda-based Basic Resources Services Ltd.

In 1991, NNPC undertook N1 billion refinery rehabilitation programme (under Gen. Babangida's regime, with Professor Jibril Aminu as petroleum resources minister). NNPC also spends about N400 million per annum for TAM on the four refineries.

In the early 1990s – the NNPC also spent about N12 billion to upgrade part of existing petroleum products pipeline from 6" diameter to 12" (inch), and build a 3-phase pipeline system. It also spent N1 billion to revamp the Apapa Jetty, a strategic fuel loading point, and N1.5 billion on the expansion of the storage and handing capacity of the major fuel import receiving facility, the Atlas Cove Marine depot in Lagos.

Currently, the NNPC is also undertaking a maintenance exercise on Atlas Cove.


Aba, Benin, Enugu, Ibadan, Gombe, Ilorin, Jos, Kaduna, Kano, Lagos (Ejigbo) Maiduguri, Makurdi, Mosimi, Ore Port Harcourt and Warri.


National Oil PLC - (NOLCHEM)
Unipetrol Nigeria PLC
Elf oil Nigerian Limited
AP-African Petroleum PLC
Total Nigeria PLC
Agip Nigeria PLC
Mobil Oil Nigeria PLC
Independent or Indigenous Oil Marketing Companies

These independent or Independent number over 350, spread all over the country, from one station to fairly large ones. Notable among them are:

Fowobi Oil
Ladegbuwa Oil
Eterna Oil PLC
Ibeto (Oil) Lubricants
Sea Petroleum and Gas

Kaduna Refinery & Petrochemical Company 

This was refinery built and commissioned in 1988 with processing capacity of 150,000 barrels per day. It has adjoining petrochemical plant which can produce asphalt, benzene and heavy paraffin base oils, used in the manufacture of vehicular lubricants and oils. Under an exchange arrangement with Saudi Arabia about 28,000 barrels per day of Arabian light – which is an heavier crude is imported and processed for production of above stated non-conventionals. In turn, Saudi Arabia receives 59,000 bbl per day of Nigerian crude oil, Qua Iboe & Bonny Medium types.

Oso Condensate

Total reserves: 500 millions bbls of owned by the NNP/Mobil Joint venture. Came into production in 1993. Nigeria’s first and largest condensate field, it was discovered in 1964 at Oso, 56 kilometers offshore Akwa Ibom with reservoir 183 metres below the seabed. Developed at cost $850 million, Oso was financed with foreign loans, especially by IFC. Oso, produced 100,000 barrels per day initially, dropped to 60,000 bbls/day from1998. Condensate output is outside OPEC quota. Other financiers: Japan Exim $47 million, European Investment Bank, EIB; $65 million, total $330m to NNPC. IFC, $170m to Mobil, and US Exim $95 million to Mobil. NNPC equity $190m; Mobil $100m. Oso yields about $300 - $500 million per annum in tax & royalties to Nigeria.


Old Port Harcourt Refinery

60,000 barrels per day processing capacity. Built by Shell-BP in 1964. Taken over by the Nigerian government in 1977. Its Nigeria’s first refinery. Located in Elesa-Eleme, near Port Harcourt. Damaged by dire in 1988. Rehabilitated and put back in production in early to late 90s.

Warri Refinery and Petrochemical Plan

Has Installed processing capacity of 125,000 barrels per day of crude. Adjoining petrochemical plant with production capacity for carbon black. Built in 1978 with initial capacity for 100,000 bbl. per day. De-bottlenecked in 1991 to increase processing capacity to 125,000 bbl/day. Original process plant supplied by technical/Snamprogetti believed to be defective. Result – frequent shutdowns and high running costs.

New Port Harcourt Refinery

Processing capacity is 150,000 barrels per day. Initially designed as an export refinery. Thus its location at the coastal village of Eleme, near the old Port Harcourt refinery. It is the most modern of Nigeria refineries and was commissioned in 1991.

Petroleum Products Marketing

Nigeria has a long history of oil or refined petroleum products marketing, dating back to seventy years – early 1930s when precursors of Shell and Mobil engaged in the distribution of petroleum products. The dominant brand of cooking oil or kerosene then was "sunflower." The domestic petroleum products market is dominated by the downstream arms of the ‘seven sisters’ or the multinational oil prospecting companies. National Oil (Shell), Mobil Oil, Elf, total Nigeria, Agip Nigeria, AP (BP), and Unipetrol.

Royal Dutch/shell owns 40 per cent equity in National Oil. Other shareholders are Nigerian government (through) NNPC 40%, 20% is held by the Nigerian public. Most of these companies have been indigenised. All the majors are quoted on the Nigerian Stock Exchange, with the exception of Elf oil, which is owned by private interest (Ibru organisation and Elf Inc.)

The local fuels market is still largely regulated. Pump price of fuels such as PMS – Premium Motor Spirit – petrol, Kerosene, diesel, MP are fixed by government. In the past, the bulk of domestic fuels consumption was supplied by local refineries. But due to the parlous state of the refineries, the bulk of local fuel requirements is met by importation. Massive importation started from 1996 under the late General Abacha's regime.

In 1998, the erstwhile military regime of general Abdulsalam Abubakar moved towards deregulation – which the industry had always wanted, by allowing the oil marketing companies to import fuel directly. In the past, this was only done by the government through the NNPC. More so, as importation was unattractive to the majors due to the local fixed price regime.

The majors, as well as independents i.e. the small-to-medium-sized indigenous oil marketers began to import fuels directly following the new policy. At the time, this helped to stem the growing supply shortfalls, which had caused serious economic problems, and aggravated the country’s economy downturn. A typical scenario were fuel queues that stretched for miles at virtually all parts of the country. But the respite was short lived. Whereas low international price of crude oil $9 – 12 per barrel at the time made fuel imports economic, rising crude oil prices in the following year (1999) made the oil marketing companies stop imports of fuels, particularly petrol, diesel and kerosene.

By the second half of 1999, the NNPC had become the major importer of fuels for domestic consumption, which it had to do for strategic reasons, to avoid a political backlash that may have security implications.

Speaking for the major oil companies, AP’s managing director, Umar Abba-Gana said they were beginning to operate at a loss – if they are to import fuel at $21 per barrel of crude and sell at fixed local price of N20 per litre of petrol.

The new Obasanjo administration has also continued importation of fuels while attempting to complete the refurbishment and turn-around maintenance of local refineries. Obasanjo also increased pump price of fuels in February. Petrol from N20 to N22 per litre, diesel N19 to N21 per litre, kerosene however remained at N17 per litre.

The unilateral price increase by the President caused widespread protests and strikes, lead mainly by the Nigerian Labour congress and, eventually lead to the reduction in originally price changes by the NNPC. The corporation had proposed N30 per litre for petrol, before the reduction to N22 by negotiation between the NLC and government.

Gas Development

In specific term, Nigeria is more of a gas province than an oil one. Natural gas deposits out-weight oil by far. Nigeria has an estimated 120 trillion cubic feet of Nigeria, about three times the size of oil reserves 22billion. Most of this occurs as associated gas i.e. gas occurring along with crude oil in same reservoir.

Generally, little exploration for gas is done in Nigeria. Thus, current gas production of about 120,00 million standard cubic feet per daily is associated gas produced during oil production in the Niger Delta.

Some of this gas has been used by Shell to generate some electricity in the Niger Delta since the 70s. Some of it is used by nearly National Electric Power Authority, NEPA, power plants at ogorade, Afam, and Delta V1. And the 220 Mega watt Egbin power plant, near Lagos. Ogorode, Afam and delta vi are fed from sapele, Obigbo and Alakiri gas pipeline, while Egbin is supplied through an extended pipeline to Lagos. In 1991, NEPA power plants consumed 75.5 per cent of the over 109,000 supplied by the Nigerian Gas Company, NGC. NGC is a subsidiary of the NNPC set-up to market the country’s produced gas locally. NGC buys the gas from the oil producing companies at agreed prices and then sells to its consumers.

The Nigerian liquefied natural gas, NLNG, is another project that was started to utilise the nation’s abundant natural gas reserves, profitably. Nigerian LGN was first broached in the early 1960s, but remained on drawing board until the late 1980s. The $3.8 billion NLNG sited on Bonny Island, several kilometers off Port Harcourt started production in august 1999. Liquefied Natural gas is a way of compressing large volumes of gas that can be carried to markets thousands of kilometers away, via specially built ships. So far, NLNG capacity of 4.6 tons per annum has delivered over 60 cargoes to European buyers and sold 4 cargoes on the US spot market.

Another plan to utilise Nigerian gas economically is the proposed West Africa Pipeline WAGP, project. The Idea is to supply gas from Nigeria to neighbouring West African countries – Benin, Ghana, Togo, and later Ivory Coast. Started in the early 1990s, the WAGP has been dogged by bilateral, multilateral problems between the countries involved. And course financing problems.

Nigerian Gas Company

Started in 1980 with headquarters in Benin City, Edo state. In 1988, it sold 84,479 million standard cubic feet, mmsct of gas, valued at N130 million. 1990 it sold 95,396 mmscf valued at N260m. 1991 NGC sold 109, /012mmscf of gas at N517.4m. NGC has also been looking at ways to promote the use of compressed natural gas CNG to run vehicles in Nigeria. 

Downstream - Fuel demand and consumption in Nigeria

1979, 2.3 million metric tons of petrol (pms) was consumed in Nigeria, according to NNPC records 1989, 4.4 MMT was consumed. In the same year, consumption of petrol grew by 12.8%. The NNPC puts annual growth rate of petroleum products consumption (and demand) at 12.4%. In 1993, NNPC calculated domestic need for petroleum products as requiring 270,000 barrels per day of crude oil to satisfy. But, according to the NNPC, as at 1994, we (Nigeria) consumed in excess of 360,000 barrels per day. It is believed that much of this "excess demand" is smuggled into neighbouring ECOWAS states due to the comparatively cheaper prices of Nigeria’s petroleum products.This is one reason why the NNPC has been advocating for what it calls "appropriate pricing of petroleum products" since the late 80s. 

Legislation Governing Petroleum Activities in Nigeria

Ever since the search for oil commence, legislations have been passed to control various petroleum activities in the country through the Petroleum Inspectorate, an independent regulatory arm of NNPC. The Petroleum Inspectorate is a non-commercial division responsible for issuing permits and licences for all activities connected with Petroleum.

Section 9 (2) of NNPC act 1977 makes provision for the Minister of Petroleum resources to delegate to the chief Executive of the Inspectorate such powers conferred on the Minister under the petroleum Act 1969, the Pipeline Act or any other enactment as he may deem fit. The Petroleum Inspectorate is therefore principally responsible for the enforcement of the following Acts and Regulations:


Oil Pipeline act cap 145, 1956. The Minerals Oil Safety Regulations 1963
The Oil Pipeline Act No. 1965. Petroleum Regulation 1967.
Oil in Navigable waters 1968.  Oil terminal Dues act 1969.
Petroleum decree 1969. Petroleum (Drilling and Production) Regulation 1969.
Petroleum (Refining) Regulations 1974. Petroleum Production and distribution (Anti-Sabotage) Act 1975
Associated Gas Re-injection Act 1979 Associated Gas Re-Injection (continued flaring of Gas Crude Oil (Transportation Shipment) Regulations 1984
Associated Gas Re-Injection (Amendment) Decree 1985 Petroleum Products (Identification of Tankers) Regulations 1985.

To discharge some of its responsibilities, the Inspectorate requires the co-operation of Law Enforcement Agencies, the Nigerian Ports authority, Customs and Exercise Department and the Nigerian Navy. The objectives which the government seeks to achieve through the various petroleum laws and regulations can be broadly defined as follows: 

  1. Assertion of national sovereignty; 
  2. Continuous exploration within the national territory, so as to have full assessment of the country’s petroleum potentials; 
  3. Ensuring efficient petroleum operations, having regard to methods of operation and conservation; 
  4. Satisfying domestic petroleum needs from domestic production and ensuring efficient distribution, marketing and pricing of petroleum products; 
  5. Securing maximum government revenue and foreign exchange benefits from petroleum production; 
  6. Obtaining the transfer of petroleum technology and the development of domestic technical expertise with the aim of exercising effective control over the petroleum industry; 
  7. Protection of the environment from oil and gas pollution; 
  8. Exercising the maximum possible national control over the petroleum so as to ensure that petroleum sector activities are consistent with national economic development plans and policies. 

In the absence of an independent Petroleum Inspectorate, the Department of Petroleum resources, DPR, an arm of the Federal Ministry of Petroleum and Mineral Resources is presently vested with the authority of the body referred to here as the Petroleum Inspectorate. 

A brief summary of the current and most significant petroleum legislations is presented as follows under appropriate headings. 

Ownership Of Petrol 

Under the Petroleum Act 1969, The entire ownership and control of all oil and gas in place within any land in Nigeria, under its territorial waters and continental shelf is vested in the state of Nigeria. The Constitution of the Federal republic of Nigeria 1979 further emphasized the state ownership in section 40 (3) which provides that "the entire property in and control of all mineral oils and natural gas in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria shall be vested in the government of the Federal and shall be managed in such manner as may be established by law". 


Oil Pipelines Act Cap 145,1958 of the Laws of the federation; Oil Pipelines Act 1965, No. 24. The Oil Pipelines Act of 1958 and updated in 1965 makes provisions for licences to be granted for the establishment and maintenance of pipelines incidental and supplemental to oil fields and oil mining and for purposes ancillary to such pipelines. The Act provides, among other things, for the right and obligations of the holder of a licence, payment of compensation for economic crops and property damaged, payment of survey fees and other miscellaneous matters. 

Petroleum Production

The following legislations relate to the production of petroleum:  

The Act vests all petroleum in place in the state. It provides for the granting of Oil Exploration Licences, Oil prospecting Licences and Oil Mining Leases and Licences to construct and operate refineries by the Minister of Petroleum Resources. The act gives the Minster power to control petroleum, petroleum products and pricing. The Act is the most comprehensive legislation and petroleum and gas. 

Petroleum (Drilling and Production) Regulations 1969 and its Amendment 1973. 

These relate to Oil Exploration Licences, Oil Prospecting Licences and Oil Mining Leases. The regulation provides for the form of licences and the right and powers of holders. It also provides for the obligations of leases and licences, recruitment and training of Nigerians. Other regulations relate to commencement of exploration and drilling, field development, accounts and records, fees, rent and royalties. 

Oil Exploration Licence (OEL) 

A non-exclusive licence and limited period, and the regulation size of an OEL is 5,000 sq. miles (12,959 sq. km). 

Oil Prospecting Licence (OPL) 

This confers exclusive rights of surface and subsurface exploration for petroleum in an area not more than 2,590 sq. km. (100 sq miles) in size for an initial period of three years with an option of renewal for a maximum of two years. The holder of an OPL has a right of petroleum won during prospecting operations, subjects to obligations imposed upon him under the Petroleum Profit act 1959. 

Oil Mining Lease (OML) 

This grants exclusive rights to explore, win, produce, transport and carry away petroleum from leased area subject to the Petroleum Act 1969 and any special terms and conditions imposed. The size of an OML as stipulated in the Regulations is 1,295 sq. km. (500sq. miles) and the specified duration is 20y years, while only the holder of an OPL is entitled to apply for an OML. 

Fiscal Requirements: 

Petroleum Profit Tax Act 1959

This is a principal legislation on Petroleum Profits Tax (PPT), with amendments in 1967, 1970, 1973, 1977 and 1979. It has now been consolidated into the main Act in the revised edition of the Laws of the Federation of Nigeria 1990 and cited as the Petroleum Profits Tax Act 1959, Cap 354, Laws of the Federation of Nigeria, 1990. The PPT imposes tax upon profits from petroleum proceeds in Nigeria to the tune of 85% with effect from 1st April, 1975. A reduced rate of 65.75% is payable within the first five years, allowing for all pre-production capitalised expenses to be fully amortised. 

Exemption of Petroleum Operations from Companies Income Tax Act 1979 CITA, Cap 60, Laws of the Federation of Nigeria 1990

The profits for any company engaged in Petroleum operation as defined by the PPT Act 1959, shall be exempted from the tax imposed by CITA, as long as those profits are derived from such operations and liable to tax under that Act. 


Royalty is charged as a percentage of the official selling price (OSPs) of petroleum produced at the rates varying between 161.3 and 20% depending on whether the concession is on or offshore and on depth of water for offshore concession. 

Memorandum of Understanding (MOU) 

The Memorandum of understanding Agreement (MOU) was signed in January, 1986 between the Federal Government and each of the oil producing companies on incentives for encouraging investments in exploration and development activities and enhancing crude oil exports. Designed to guarantee to the oil companies a profit margin irrespective of market conditions, the MOU provided a minimum margin of $2 per barrel by January, 1986 and $2.30 from July, 1991,after Tax and Royalty, to the companies on the equity crude oil. 

Associated Gas Re-Injection Act 1979 No.99

This Act, which is the only legislation so far on gas, makes it obligatory for every company producing oil in Nigeria to summit detailed plans for gas utilisation. The Act also stipulates that no company engaged in production of oil shall after January 1, 1984 flare gas produced in association with oil without permission in writing from the Minister. 

Associated Gas Re-Injection (Continued Flaring of Gas Regulations 1984) 

In view of the limited domestic market for gas and the high cost associated with gas development, the oil companies could not embark on any gas development programme. Since Government depends on oil production for her revenue, she had to review the 1979 gas Re-Injection Decree to enable the oil companies to produce oil. The Regulations set out the conditions for the issuance of Certificate by the Minister under Section3 (2) of the Associated Gas Re-Injection Act 1979 for the continued flaring of gas in a particular field or fields by companies engaged in the production of oil and gas. 

The Associated Gas Re-Injection (Amendment) Decree No. 7 of 1985 

This Decree was promulgated with effect from 20th April, 1985 to deal the problems arising from the implementation of the associated Gas Re-Injection Act 1979. A new subsection 2 in the amended Decree was substituted for subsection 2 of section 3 of the 1979 Act. The 1985 Decree permits a company engaged in the production of oil and gas to continue to flare gas in a particular field or fields if the issues a certificate to that effect and if he is satisfied after January 1, 1984 that utilisation or re-injection of the produced gas is not appropriate or feasible in the particular field or fields. The certificate is subject to such terms and conditions as the Minister may impose. The certificate may permit the company to continue to flare gas in particular field or fields if the company pays such sum as the Minister may from time to time prescribe for every 28.317 standard cubic meter of gas flared. The fee prescribe is eleven kobo per 28.317 standard cubic meter of gas flared. Payments shall be made in the same manner and subject to the same procedure as for the payment of royalties by companies engaged in the production of oil i.e. in foreign currency. 

Oil Pollution Control Provision Under Existing Statues

The Statues listed below which deal with oil pollution are designed to prohibit or control the pollution of water, air and land and they also prescribe sanctions in the form of fines, imprisonment or damages to be enforced against persons or companies who infringe the provisions. 

  • Petroleum Regulation 1967 
  • Oil in Navigable Waters Act 1968 
  • Oil in Navigable Waters Regulations 1968 
  • Petroleum Act 1969 Petroleum (Drilling & Production) Regulations 1969 
  • Petroleum (Drilling & Production) Amendment Regulations 1973 
  • Petroleum Refining Regulations 1974; and 
  • Oil Pipelines Act 1956. 

Petroleum Product Pricing 

The Petroleum Equalisation Fund (Management Board etc.) Act 1975 establishes the Fund which is to be applied for the reimbursement of oil marketing companies for any losses suffered by them arising from the sale of petroleum products at uniform prices throughout the country. The prices are fixed by the Minister pursuant to Section 5 (1) of the Petroleum Act 1969 and is managed by a Management Board also established by the Act. 

Oil Pipeline The Oil Pipelines Act Cap 145 of the laws of the Federation 1958 lays down penalties for any person who willfully hinders or obstruct any licences from entering or taking possession or using any land comprised in the licence or without lawful authority interferes with or causes damage to any oil pipeline. The Petroleum Production and Distribution Anti-Sabotage Act 1975 prescribes more severe penalties. 

The Decree creates the offence of sabotage in respect of willful acts calculated to disrupt or interfere with the distribution of petroleum products. Offenders are to be tried by Military Tribunals to be constituted by the Head of the Federal Military government. Persons found guilty of the offence of sabotage are liable to death sentences or to imprisonment for 21 years. A stricter penalty of death by firing squad was provided under section 6 (2) (e) of the Special Tribunal (Miscellaneous offences) Decree No. 20 of 1984, which provides that "any person who willfully or maliciously obstructs, damages, destroy or otherwise tampers or interferes with the free flow of any crude or refined petroleum product through an oil pipeline shall on conviction be liable to suffer death by the firing squad". 

Winners of the 2nd Bidding Round Concessions

CHEVRON NIG. OPL-801,805,810,820,812,818,822 BENUE
CHEVRON NIG. OML-46-55,89-95,97 NIGER
EXXON  OPL-209  
ELF NIG. LTD OPL-447,93,95-97 NIGER
ELF NIG. LTD OPL-222,223,802,807 CHAD
NIG AGIP OIL CO. 823,824,829,830,836. BENUE
SHELL OPL-803,806,809 BENUE
SHELL OML-1,4,5,7,11-46 NIGER
SHELL 71-74,76,77,79,81 NIGER

Nigeria's Crude Oil Export Terminals

BONNY: -Operator: Shell Petroleum Development
Location: About 560 km S.E of Lagos.
Loading Capacity: 6,500 T/H
22km of sea line with 2 single buoy moorings, for tankers
loading up to 300,000 – 230,000 DWTStorage Capacity: Not available

FORCADOS: -Operator: Shell Petroleum Development
Location: About 260 km S.E of Lagos.
Loading Capacity: 11,000 T/Hr
26 km sea line with 2 single buoy moorings for tankers loading up to 254,000 DWT
(Total storage capacity Bonny-Forcados: 13 million bbls.

ESCRAVOS: -Operator: Chevron Nigeria Limited
Location: About 220 km S.E. of Lagos
Loading Capacity: 3,750 T/Hr
30 km of sea line with 2 single buoy moorings for tanker, loading up to 350,00 DOT
Storage capacity: 3.6 million barrels

QUA IBO: -Operator: Mobile Producing
Location: About 650 km S.E. of Lagos
Loading Capacity: 3,750 T/Hr
21 km of sea line with 2 single buoy moorings for tankers loading up to 285,000 DWT

RASS -Operator: Nigerian Agip Oil Company, NAOC
Location: about 470 km S.E. of Lagos 26 km of sea line with 2 single buoy moorings for tankers
Loading up to 300,000 DWT
Storage Capacity: 3,558 million barrels

PENNINGTON: -Operator: Texaco (Overseas) Nigeria
Location: About 370 km S.E. of Lagos
Loading Capacity: 2,000 T/Hr
Tankers up to 250,000: Not Available

Editor's Note: NEPA is now called Power Holding Company of Nigeria, PHCN from 2005

Top Picture: NNPC Building, Abuja, Nigeria's Capital
Second Picture: NNPC Off Shore Oil Rig

See Also: Nigeria's Gas Sector: Investment Opportunities (Separate page)


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