INTRODUCTION

The Nigerian environment is one blessed with abundant flora and fauna. Prior to

the discovery of oil in 1956, the country was known to be highly dependent on

the agricultural sector which contributed over 75 percent of export earnings

before 1970. Since then, however, agriculture has stagnated while the rate of

crude oil exportation has always been on a consistent increase. Nigeria’s

petroleum exportation has improved from its first 5000 barrels exported in 1958

to the 2.5 million barrels per day in 2004. There is no doubt that there has been

a tremendous improvement in the Nigerian petroleum industry and this has to

some extent been advantageous to the Nigerian economy. However the price

which the environment has had to pay for this development far outweighs its

advantages. The areas where this oil is extracted most of the time have to bear

the brunt of incidents emanating majorly from oil spillage, gas flaring and other

minor sources such as drill cuttings, drilling mud and effluents. The effects are

hazardous to the environment and its effects range from soil infertility to health

risks which could lead to eventual loss of life as witnessed by the Erovie

community. The government and the multinational companies therefore have a

major role to play in the prevention of such incidents. This five chapter thesis

therefore gives us an insight into the environmental degradation suffered by

these oil producing areas and the measures taken by the government in curbing

it.

The first chapter of this project gives us an insight into petroleum and the

environment. It Traces its history to the earliest discovery and portrays its impact

on the world today. I have also briefly given an insight into the possible effect it

might have on the environment. The case study of this thesis is the Niger Delta

region which is presently making the headlines due to its present troubled state.

This chapter therefore gives us an understanding of the region and looks into

aspects such as its geography, ethnic composition and its environmental

characteristics. Chapter one also gives readers an insight into the petroleum

industry in Nigeria (past and present).

The second chapter of this thesis is an analysis of the source of this pollution in

the region. Environmental pollution from the oil industry arises from various

sources which range from drill cuttings, drilling mud and effluents to other major

sources such as oil spillage and gas flaring. Oil spillage and gas flaring are the

two most important sources which will be analysed in chapter two.

The following chapter takes a look at the impact this environmental pollution has

had on our environment with a review of the various major pollution incidents

that have occurred in the Nigeria with particular reference to the Niger Delta

region.

The fourth chapter takes a look at the various laws in existence which regulates

the environment and the extent to which environmental standards have been

implemented. The role of the judiciary in the protection of the environment with

particular reference to the case of Gbemre v Shell Petroleum Development

Company is another major issue which will be looked into in this chapter.

Our environment is a reflection of who we are and protecting it should therefore

be prioritized because our environment is critical to our well-being and survival

presently as well as the generations to come. The government must therefore

make optimum use of our petroleum resource and at the same time act as

responsible environmental stewards for our overall benefit.

CHAPTER ONE

HISTORICAL BACKGROUNDS AND DEFINITION OF

CONCEPTS

1.0 Petroleum and the Environment:

Petroleum which is the cornerstone of this thesis is a multipurpose

substance we all know to be found underground. It contains a lot of

energy and can be converted to various fuels such as gasoline,

kerosene and heating oil etc. Petroleum is classified as a fossil fuel

due to the fact that it is gotten from the remains of plants, animals

and most especially marine organisms which have passed through

the process of decomposition. Energy is a necessary ingredient of

any economy and petroleum is one of the chief sources of energy in

the world today. It can therefore be rightly said that petroleum is a

major force behind the sustenance of most developing and

developed economies today. The energy in petroleum is gotten from

the energy in plants and animals which can be traced to its original

source which is the sun.

According to Georg Bauer a renowned German mineralogist, “...petroleum

is a naturally occurring, flammable liquid found in rock formations in the

Earth consisting of a complex mixture of hydrocarbons of various

molecular weights, plus other organic compounds”1. Petroleum is made up

of hydrocarbons and can exist in liquid, solid and gaseous form. In liquid

form, it is known as crude oil, in gaseous form, it is known as natural gas while in

Solid form it appears as coal, shale, bitumen, tar sands etc. Petroleum or crude

oil is a naturally occurring oily, bituminous liquid composed of various

organic chemicals. It is found in large quantities below the surface of Earth

and is used as a fuel and as a raw material in the chemical industry.

Modern industrial societies use it primarily to achieve a degree of mobility

—on land, at sea, and in the air—that was barely imaginable less than 100

years ago2. Petroleum is earlier referred to as a multipurpose substance

because it has various uses. Some of these uses include.

1. Fuels for Transportation; Liquid products such as gasoline, jet

fuel, and marine fuel which together account for more than

half the volume of output, serve the transportation industry.

Petroleum can therefore be seen as very vital to the

sustenance of our modern day transportation industry

2. Fuels for energy production; Petroleum fuels heat homes,

factories, and offices and also generate electric power

3. Nonfuel products; From each of the fractions distilled from

crude oil or its cracked or processed products, valuable and

indispensable non fuel materials are made. Some of the major

products falling under this category are: ethylene, propylene,

butylenes, and other reactive gases for petrochemical

industries output of polymers, rubbers, chemicals, textiles and

so on.

1 Georg bauer. De Natura Fossilium. translated 19552 Doscher, Todd M. "Petroleum." Microsoft® Encarta® 2009 [DVD].

4. It is however noteworthy that this petroleum which is very

essential to various developed and developing nations is a

finite resource and therefore cannot be renewed once it has

been extracted.3

Petroleum according to the Petroleum Act is defined is said to

include “...mineral oil (or any related hydrocarbon) or natural gas

as it exists in its natural state in strata, and does not include coal

or bituminous shales or other stratified deposits from which oil

can be extracted by destructive distillation”4. From the

aforestated definition we can see that mineral oil or natural gas

in its natural state is what is referred to as petroleum. It is

completely harmless to the environment in situ but once it is

extracted complications begin to occur. Petroleum itself is

therefore not the problem but the exploration process which

reveals a lack of regard for the environment.

As the saying goes, our environment which we live and work is a

reflection of our attitudes. Our level of regard for our

environment will always be portrayed by the environment around

us. The environment is the complex of physical, chemical and

biological factors/processes which sustain life. Man is part of this

network of components which make up the planetary system.

Science and history are both agreed that before the advent of

man, the environment had already existed. Thus the environment

3 Amyx, J.W.1960.Petroleum Reservoir Engineering. McGraw-Hill Encyclopaedia of science and Technology. p. 804 Section 15 (1) Petroleum Act 1969 Cap 350 LFN

preceded, man and by deduction, also preceded the human

technological and scientific development activities. It may rightly

be postulated that this environment before the advent of man

was pure and “unspoiled.”5The activity of man for very long time

has been known to be detrimental to the environment and this

situation intensified with the rapid technological advancement

peculiar to the 21st century. The Niger delta environment which is

the subject matter of this thesis is currently in a state of

upheaval which can be traced to social, economic and most

importantly environmental factors. The environmental

degradation suffered by this region has become an increasing

concern globally in recent times. Although there are other factors

responsible for this crises, the environment should come first as

it guarantees our continued existence. The environment is man's

first right. Without a safe environment, man cannot exist to claim

other rights, be they political, social, or economic. Our

environment should be of paramount concern to us at all times

because it guarantees not only our existence, but that of our

future generations

1.1 Petroleum Development in Nigeria:

Petroleum development in Nigeria can be traced to the early

activities of the Nigerian Bitumen Co. of Germany & British Colonial

5 Okorodudu-Fubara M T 1998 Law of Environmental Production pp 15

Petroleum when they began operations around Okitipupa in

1908.Although their activities were cut short by the outbreak of the First

World War. The modern oil industry in Nigeria began with the discovery of

oil in Nigeria. 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.6

In a bid to critically analyze the development of petroleum in Nigeria, it is

important take into consideration, the major players in the industry. The

Nigerian oil industry over time has metamorphosed into an industry where

there are only two major participants namely; the government and the

multinationals. For a more comprehensible chronological sequence of

petroleum development in Nigeria, I will therefore be taking a dynamic

and critical look at the history of both foreign participation and

government participation in the Nigerian oil industry and how they have

affected petroleum development.

1.1.1 Foreign Participation:

Foreign participation in the Nigerian oil industry dates back to the Nigerian

Bitumen Company and its activities prior to the outbreak of the First World

War. British businessman, John Simon Bergheim convinced the Colonial

Office and the Government of Southern Nigeria that based on his

knowledge of the region's geology, petroleum existed in Southern Nigeria

and that his company, the Nigeria Bitumen Corporation, could find it. He

had already achieved a monopoly on prospecting rights in Nigeria by

buying up all other drilling licenses.

6 Retrieved 6th may 2009 from http:\\www.nnpcgroup.org

For the next six years, officials in the Colonial Office protected Bergheim's

monopoly of the prospecting rights, rewrote mining legislation at his

request creating the Southern Nigerian Mining Regulation (Oil Ordinance)

of 1907 and provided the Nigeria Bitumen Corporation with a loan to

support its search for petroleum. By 1912, the Corporation had sunk about

15 wells in Southern Nigeria, east wards from the Lekki lagoon towards

the Niger Delta, and had already spent 143,000 pounds.

In September that year, however, Bergeim was killed in an automobile

accident and with him died much of the aggressive drive to find oil in

Nigeria. Thus, the first search for oil in Nigeria ended in mid-1913 and was

not resumed seriously for almost 25 years. Shortly after Bergeim's death,

World War 1 set in and oil exploration in the country ceased until 1937,

when an Anglo-Dutch consortium, Shell D' Arcy, came to Nigeria and had

the whole country as one concession. Between 1938 and 1939, the

company drilled seven bore-holes for about 16,296 pounds around Owerri

without any success. This second phase of the search for oil in the country

was interrupted by World War II (1939-1945) but by 1951, the company

had drilled its exploration well, called IHUO-1.

A second well soon followed in 1953 called AKATA-1, with just marginal

gas. Between 1953 and 1955, Shell had drilled 13 additional wells. It

eventually struck its first commercial well in 1956 at Oloibiri in present-

day Bayelsa State. That discovery, after an investment of over 30 million

naira, proved the venture commercially viable. Later, in the same year,

more oil was found at Afam in Rivers State. Subsequently, the

construction of pipelines from Oloibiri to Port Harcourt was undertaken to

facilitate export. The export of the first cargo of crude oil took place on 17

February, 1958.

The successes of Shell encouraged other companies to join in the

exploration race. Mobil had been awarded the Sokoto Basin, the Benue

Trough and fringes of the Niger Delta to explore in 1956. After some

seismic and field geological surveys in the Sokoto Basin where it recorded

no success, it withdrew from Sokoto and obtained licence to explore in the

Dahomey Basin. Between 1959 and 1961, Mobil had drilled four wells in

Dahomey Basin which were dry and the company pulled out of the area.

Meanwhile, in 1959, the sole concession right over the whole country,

earlier granted to Shell, was reviewed and exploration rights were

extended to other foreign companies.

This was in line with the policy of increasing the pace of exploration, while

at the same time ensuring that the country was not too dependent on one

company or nation. Shell thus, relinquished about 50 per cent of its Niger

Delta concession and retained the successful or potentially successful

parts. In April 1960, Tenneco, an American company, arrived in Nigeria,

and was granted a concession along the western coast. This was the

position when, in October 1960, Nigeria gained independence from

Britain.

The attainment of independence in 1960 led to intense exploration

activities, as the nation put in place policies that would lead to major

economic and political changes in the oil sector. Firstly, exploration

companies outside Britain and U.S.A. were invited to establish presence

and explore in Nigeria. Oil was also becoming a vital energy fuel, and

Nigeria's production had more than tripled from 5,000 barrels per day in

1958, to 17,000 barrels per day in 1960.

Within the first five years of independence, therefore, no less than nine

international oil companies had become active in Nigeria, namely: Shell-

BP, Mobil, Tenneco, Texaco, Gulf (now Chevron), Safrap (now Elf), Agip,

Philip and Esso. These internationals were soon joined, in the late 1960s,

by Japan Petroleum, Occidental, Deminex, Union Oil, Niger Petroleum and

Niger Oil Resources. The climax of that era was the forma tin of the

Nigerian National Oil Corporation (NNOC), the predecessor of the Nigerian

National Petroleum Corporation (NNPC), and the admission of Nigeria into

OPEC, the Organisation of Petroleum Exporting Countries, in July, 1971.

Oil production had, by this period, moved from 17,000 barrels per day

(bpd) in 1960 to 45,000 bpd in 1966 and later to 1 million barrels per day

in 1970, shortly after the civil war. Nigeria's economy became increasingly

dependent on crude oil, on account of revenue accruing thereof, to meet

the challenges of the post-civil war era. The Nigerian government also

entered into joint venture agreements with several multinational oil

companies engaged in oil exploration and production activities in the

country.

In January 1986, the government introduced more attractive fiscal terms

for private sector participation in oil and gas development in the country.

This was through a Memorandum of Understanding (MOU) providing a

guaranteed margin of two dollars per barrel to the producing companies in

exchange for certain exploration and enhanced recovery commitments.

Five years later, the government offered new MOU's which provided for

much better terms in recognition of inflation and to encourage foreign

partners to continue to expand their investments. Since then, the

investments of the major oil companies in the country have risen steadily

in response to these incentives. This response has been most evident not

only in the oil sector but also in the vast and continuing expansion of

activities in the gas sector, led by Shell, Mobil and Chevron.7

The big six refers major foreign owned oil companies participating in joint

ventures agreements in Nigeria. They include Shell, Chevron, Mobil, Agip,

Elf and Texaco and are all partners to joint venture agreements with the

NNPC in Nigeria. These six multinational oil companies still remain a

dominant force in the Nigerian oil industry despite governments ever

growing dominance in the in the industry, it is a known fact that the

multinational oil companies still play a major role in the industry which on

the long run is less beneficial to the host country (Nigeria) and more

beneficial to foreign economies. Kwame Nkrumah was right to have

referred to these multinational oil companies as being neo-colonialist

when he stated inter alia “...Africa is a paradox which illustrates and

highlights neo-colonialism her earth is rich, yet the products that come

from above and below her soil continue to enrich not

Africans predominantly but groups and individuals who operate to Africa’s

7 Obasi,N K , Foreign Participation in the Oil and Gas Industry, Retrieved March.28,2009 from http://www.nigerianonline.com

Impoverishment…. If Africa’s multiple resources were used in her own

development,

They could place her among the modernized continents of the world. But

her resources

have been, and still are, being used for the greater development of

overseas

Interests”8. Except we are able to develop our technical-know-how in the

oil industry to an acceptable standard there is a very slim chance of any

change in the near future.

1.1.2 Government Participation:

Government participation in the Nigerian oil industry can be said to be a

recent development it was not until Nigeria joined the Organisation of

Petroleum Exporting Countries in 1971 that the government began to play

a major role in the industry. Nigeria’s decision to join OPEC marked a turn

around and a giant step towards government participation in the industry.

Prior to this time, government participation in the industry was very

limited. However, the 1962 resolution on permanent sovereignty over

natural resources was said to have set the ball rolling in the crusade for

government participation in the industry.

In accordance with OPEC'S 1968 and 1971 Resolutions urging member countries

to participate in oil operations by acquiring ownership in the concessions held by

foreign companies, Nigeria's Military government in 1971 established the

8 K. NKRUMAH, “Neo-colonialism: The Last Stage of Imperialism”, London: Thomas Nelson & Sons Ltd.1965.

Nigerian National Oil Corporation (NNOC) by Decree. The NNOC was empowered

to acquire any asset and liability in existing oil companies on behalf of the

Nigerian government, and to participate in all phases of the petroleum industry.

In that same year, the government acquired 33% and 35% of the operating

interests of Agip and Elf respectively. Further acquisitions occurred in 1973 and

1974 in the operations of all the other foreign oil companies. Government

participation in the commercial oil sector continues to this day through the

NNPC. The NNPC was formed in 1977. It inherited the commercial activities of the

NNOC and the supervisory/regulatory role of the Federal Ministry of Petroleum

Resources. However a de-merger took place in 1984 and presently, the NNPC

undertakes commercial activities, whilst the Federal Ministry of Petroleum

Resources acting through the Department of Petroleum Resources (DPR) is the

regulatory authority.9The NNPC, ever since its establishment has served as a link

between the government and the multinationals and also helps the government

to keep a tab on the activities of the oil and gas sector. The NNPC also

participates in joint venture agreements with these multinational oil companies

and has sixty percent interests in the joint venture agreements.

1.2 The Nigerian Oil Industry

The Nigeria is the second largest producer of crude oil in Africa and is

blessed with abundant natural gas reserves. as at 2006 Nigeria was the

largest oil producer in Africa and the sixth

largest in the world, averaging 2.7 million barrels per day (bbl/d) with

9 Akinjide&co Nigeria: A Guide To The Nigerian Energy Sector – Oil

proven oil reserves at 35.2 billion barrels10. In February 2007, the then

state minister for petroleum Dr. Edmund Daukoru put Nigeria's proven oil

reserves at about 35 bn barrels, a major increase from 5 bn barrels in

199911.The growth of the Nigerian oil industry has been stunted by the

persistent Niger Delta crises forcing the shutdown of major oil stations in

Niger Delta area. Their tactical asymmetrical warfare has been

detrimental to the growth of the oil industry and this will continue being

the case unless an agreement is made. As of April 2007, an estimated

587,000 bbl/d of crude production is shut-in. The majority of shut-in

production is located onshore in the Niger Delta, with the exception of the

offshore 115,000 bbl/d EA Platform. Since December 2005, Nigeria has

lost an estimated 16 billion dollars in export revenues due to shut-in oil

production. Shell has incurred the majority of shut-in oil production

(477,000 bbl/d), followed by Chevron (70,000 bbl/d) and Agip (40,000

bbl/d). Militant attacks on oil infrastructure have also crippled Nigeria’s

domestic refining capabilities. In February 2006, militant attacks in the

western delta region forced the Warri (125,000 bbl/d) and Kaduna

(110,000 bbl/d) refineries to shutdown due to a lack of feedstock. In

December 2006, operators shutdown Nigeria’s two Port Harcourt refineries

for two months due to technical problems. The Niger Delta rebel group,

Movement for the Emancipation of the Niger Delta (MEND) and other

militia organizations in search of monetary compensation and/or political

leverage are the ones behind the attacks. In addition to abductions,

thousands of foreign workers and their families have left the Niger Delta 10 Nwilo, P.C. & O.T. Badejo, 2005 Oil Spill Problems and Management in the NigerDelta. International Oil Spill Conference,Florida, USA.11 Retrieved from www.thefreelibrary.com 19 April 2009

due to continued hostilities. At least three companies, including a private

drilling company and pipeline laying company have also left. MEND has

stipulated numerous conditions to the Nigerian government that it wants

met or else it has vowed to continue the attacks. Chief among the

conditions is greater revenue sharing of the oil wealth, increased local

control of oil property, the release of tribal prisoners, and transparency of

government budgets. International oil companies (IOCs) are not expected

to repair damaged oil infrastructure until after the elections are over12. As

a result of these conflicts, Nigeria’s production rate is on a constant

decline and according to statistics; the situation has shown little or no sign

of improvement. Production at Nigeria's oil facilities may have continued

to drop drastically, owing to increasing tension in the oil-producing region,

Niger Delta. Leaving no respite for smooth operation, the act of militancy

in the region has halted several production activities, which had resulted

in shut-in of about 25 per cent of the nation's oil production capacity of

2.6 million barrels per day (bpd).The production, which stood at 1.88

million barrels per day as at mid January, may have dipped further with

current shut-in from major oil facilities in the Niger Delta. The latest, being

the force majeure declared by Shell at its Bonny oil terminal, leaving its

productions at 90,000 bpd, from the normal level of 500,000bpd.The

Guardian gathered that before the Shell's pronouncement, shut-ins due to

militant attack stood at 40,000bpd.Besides the militant induced shut-in,

Nigeria is compelled to comply with the automatic cut by the members of

the Organisation of Petroleum Exporting Countries (OPEC) to support

12 Retrieved 23 April 2009 from http://www.eia.doe.gov/cabs/Nigeria/Oil.html

global oil prices. It had therefore trimmed about 160,000 bpd, being its

share of the 2.2 million bpd OPEC output cut.13

The table above represents Nigeria’s Oil Production from 1986-2006.A

sharp decline is noticed in the last two years. This decline occurs due to

the ethnic unrest in the Niger Delta region. The persistent conflicts in the

region has affected Nigeria’s oil production rate drastically even up to the

time of this writing.

1.2.1 Upstream Sector

This is the most important sector of the Nigerian oil industry as it

accounts for a huge chunk of Nigeria’s total export. Over the

years, the Nigerian government has concentrated more on this

13 Salau S. Nigeria's oil production dips further, as militants continue onslaught. The Guardian. Wednesday, February 18, 2009

sector. The production rate would have increased drastically if

not of the violence in the Niger Delta region. The upstream sector

still remains very important to the Government and this is largely

due to the fact that it constitutes a major proportion of Nigeria’s

foreign exchange earnings. The Upstream activities in the

Nigerian oil and gas sector include;

(i) Petroleum Exploration and Exploitation.

(ii) Search for development of local substitute for such items as

Medium pressure valve, pumps, shallow drilling equipment,

Drilling mud, bits fittings, drilling cements etc.

(iii) Manufacturing of consumable materials in exploration such

as explosives, detonators, steel castings, magnetic tapes etc.

(iv) Other areas in the services sector of the upstream are:

1. Construction and Installation

2. Maintenance

3. Pipelines

4. Well Services and

5. Transportation Support Services.14

1.2.1 Downstream Sector

14 Retrieved 6th may 2009 from http:\\www.nigeriagalleria.com/investment

This sector deals with post production in the oil and gas sector

and includes refining and processing stages. Transportation is an

integral aspect of the downstream sector and pipelines are very

essential at this stage. Oil and gas pipelines come under the

heading of transportation. From experience, the cheapest, most

convenient and reliable means of transporting petroleum from

field to a land destination within a reasonable distance is through

pipelines.15Downstream activities majorly include;

(i) Domestic Production and marketing of Liquefied Petroleum

Gas (LPG)

(ii) Manufacturing of LPG cylinders, valves and regulators,

installation of filing plants, Retail distribution and development of

simple, flexible and much less expensive gas burner to

encourage the use of gas instead of wood and other fuels.

(iii) Establishment of processing plants and industries for:

- The production of refined mineral oil, petroleum jelly and

grease.

- The manufacture of bituminous based water/damp-proof

building materials such as roofing sheets, floor tiles, rubber

products, tarpaulin. Building of asphalt storage, packaging and

blending plants to handle the product for export.

15 See Etikerense pp 85

(iv) Establishment of chemical industries such as distillation units

for the production of naphtha and other special boiling point

solvents used in plant and other food processing industries.

(v) Establishment of industries for processing Linear Alkyl

Benzene, Carbon Black and Polypropylene.

(vi) Development of Phase II (Phase III to join later) of Nigeria’s

Petrochemical Programmed.

(vii) Participation in all phases of the Nigeria Gas Industry

development programmed from exploration, gathering,

production and processing to transmission.

(viii) Establishment of small scale industries to produce chemicals

and Solvents, for example Chlorinated methane, Formaldehyde,

Acetylene, etc., from natural gas.

(ix) Refining: One condition for purchasing Nigerian Crude Oil is

the ownership of an efficient refinery. The shelter which the

domestic petroleum products market enjoys, almost completely

seals the prospects and viability of privately financed refinery for

locally consumed petroleum products. However, opportunities

exist for the construction of a refinery in bonded premises with

adequate export facilities for dedication to the export market.

(x) Products Marketing: Petroleum Product Marketing would seem

sealed with hardly any opportunity except by way of establishing

an independent marketing outfit or aspiring to establish

dealership with the marketers.

The nation’s pipeline and depot network consists of 3,001km of

pipeline of varying sizes as well as sixteen (16) storage depots.

These pipelines and networks traverse the length and breathe of

the country. The system therefore must be maintained in a

healthy state for effective and efficient distribution of products.16

1.3 Niger-Delta: The Area and the People

Nigeria's oil is mainly produced from the Niger Delta area, eighty per cent of

which is located in Delta, Rivers and Bayelsa states. These three states produce

75% of the nation’s petroleum. Other states within which the Delta is situated

are Edo, Cross River, Akwa Ibom and Ondo States. The Delta covers over 20,000

square kilometres, and is one of the largest deltas in the world. The people of the

Niger Delta are primarily from the minority tribes of Nigeria and are very poor.

They lack modern infrastructure and live under poor health conditions.17The

Niger delta region is predominantly composed of people living in poverty. It is a

region which produces most of Nigeria’s petroleum which is her Nigeria’s chief

source of income.

1.3.1 Geographical Definition of the Niger Delta

Niger Delta covers all the land between latitude 4o151N and 4o501N and

longitude 5o251E and 7o371E with a total area of 20,000km2.The Niger Delta, as

now defined officially by the Nigerian Government, extends over about 70,000

km² and makes up 7.5% of Nigeria’s land mass. Historically and cartographically,

16 Retrieved 6th may 2009 from http:\\www.nigeriagalleria.com/investment 17 Omorogbe Y Oil and Gas Law in Nigeria 2003 p 143-144

it consists of present day Bayelsa, Delta and Rivers States. In the year 2000,

however, Obansanjo's regime expanded its definition to include Abia State, Akwa

Ibom State, Cross River State, Edo State, Imo State and Ondo State. Some 31

million people of more than 40 ethnic groups including the Ijaw and Igbo people,

speaking some 250 dialects live in the Delta.18The delta region in Nigeria is

known to be one of the largest deltas in the world.

1.3.2 Biological Diversity of the Niger Delta

The Niger Delta is a region blessed with abundant flora and fauna. The Niger

River is an important ecosystem that needs to be protected, for it is home to 36

families and nearly 250 species of fish, of which 20 are endemic, meaning they

are found nowhere else on Earth. Our constant exploration for oil has been

detrimental to the flora and fauna in this region. There is a gradual depletion of

this ecosystem and these species are fast becoming extinct. The rich flora and

fauna of the area supplied the immediate source of livelihood for the people of

the region for many generations. For so long the people lived in harmony, and

there was evident balance in the ecosystem.

The Niger Delta region is characterised by wetlands and water bodies with creeks

and rivers criss-crossing the entire southern parts. However the region is

endowed with enormous natural resources. The region one of the world's largest

mangrove forest with the most extensive freshwater swamp forests and tropical

rain forests characterised by great biological diversity. Some of the more

common tree species in this region include; Lophira alata, Pycnanthus

angolensis, Ricinodendron heudelotii, Sacoglottis gabonensis, Uapaca spp.,

Hallea ledermannii, Albizia adianthifolia, Irvingia gabonensis, Klainedoxa

18 United Nations Framework Convention on Climate Change." UNFCC. Nov. 2003.

gabonensis, Treculia africana, and Ficus vogeliana. The oil palm (Elaeis

guineensis) is common, and the understory is often dominated by rattans (e.g.

Calamus deerratus). The second zone is the eastern delta flank, which is

shrinking relative to the western flank. Some lowland forest non-swamp species

are found here (e.g. Ogilby's Duiker Cephalophus ogilbyi and Sclater's Guenon

Cercopithecus sclateri). The third zone is the central backswamp area of the

delta, crossed by old creek levees. This area is not often flooded and is not

influenced by the tides, and hence relatively stable. Most of the forest here is

always waterlogged. The only systematically collected data for the Niger Delta's

vegetation comes from this zone. The distribution of tree species in the forest is

determined by hydrology with drier remnants of levees being more diverse than

the waterlogged back swamps. The forest is dominated by the following tree

species: Euphorbiaceae (Uapaca spp., Klaineanthus gaboniae, Anthostema

aubreyanum, Macaranga spp.) Annonaceae (Xylopia spp., Hexalobus crispiflorus)

Guttiferae (Symphonia globulifera, Pentadesma buteraceae), Rubiaceae (Hallea

ledermannii, Rothmannia spp.), Myristicaceae (Coelocaryon preussii, Pycnanthus

marchalianus), and Ctenolophonaceae (Ctenolophon englerianus).19

1.3.3 Ethnic Composition of the Niger Delta:

The Niger delta region is composed of diverse ethnic groups with

different cultures. Hence, ethnic conflict is a major source of the

current unrest in the region. Over the years there has been a range of

contradictory opinions as to the ethnic groups which compose the

Niger delta. While many perceive the Niger delta to be synonymous

with oil producing areas, others define the region in terms of its

ethnography. ‘The 1958 Nigerian Constitutional provision for the Niger

Delta inter alia states as follows:19 Zabbey,N Impact of Extractive Industries on the Biodiversity of the Niger Delta Region, Nigeria 2007

To allay the fears of the minority indigenes of the Niger Delta and

address the development needs of the peculiar terrain of the Niger

Delta, before granting independence to Nigeria, the British Government

proposed that the Niger Delta be declared a Special Federal Territory.

Linguistically, ethnographically and culturally, the Niger Delta of the

pre-crude oil and gas era comprised a bewildering mix of ethnic

groups. Among these, the communities of the Ijaw (in Eastern and

Western), the Ogoni, Itsekiri, Urhobo, Isoko, Ikwerre and Delta Igbo hit

more headlines than others did. These are the several communities in

the present-day Rivers, Bayelsa and Delta States as well as part of

Ondo State. Misconceptions concerning the correct focus of the Niger

Delta made more controversial, more complex and politically incorrect

public debates on effective answers to the vexatious questions

involved. For example, while presenting the Niger Delta Development

Commission (NDDC) Bill to the Senate, President Olusegun Obasanjo

included Ondo, Imo, Abia and Edo States. Furthermore, Governors of

various states as far as Anambra were jostling for inclusion in the Niger

Delta.20

20 Retrieved April 7th 2009 from http://www.earthrights.net/nigeria/news/definition.html