Petroleum

3.4119318181698 (1408)
Posted by bender 02/26/2009 @ 23:40

Tags : petroleum, energy, sciences

News headlines
Whiting Petroleum earns $334.2M in stock offering - Forbes
AP , 06.23.09, 05:49 PM EDT NEW YORK -- Whiting Petroleum Corporation said Tuesday it earned $334.2 million from a public offering of 3.45 million shares of 6.25 percent convertible perpetual preferred stock. The Denver-based company, which explores...
Longwei Petroleum Announces Plans for New 70000 Metric Ton ... - MarketWatch
TAIYUAN CITY, China, June 23, 2009 /PRNewswire-Asia-FirstCall via COMTEX/ -- Longwei Petroleum Investment Holding Ltd. , a leading China-based energy trading company operating in Shanxi Province, China, today announced its plans to complete...
Petroleum Consolidators Completes Second Round of Due Diligence ... - SYS-CON Media (press release)
Petroleum Consolidators' President & CEO David Cohen stated, "Since having announced the record date of June 10, 2009 for the intended spin-off, both Petroleum Consolidators and the Merger Candidate, based in Sullivan County, Indiana, have been working...
Occidental Petroleum (OXY) PriceWatch Alert for June 23, 2009 - Market Intelligence Center
Occidental Petroleum (NYSE: OXY) closed yesterday at $61.37. So far the stock has hit a 52-week low of $39.93 and 52-week high of $92.49. Occidental Petroleum stock has been showing support around 59.27 and resistance in the 64.57 range....
Abraxas Petroleum, Abraxas Energy plan merger - Bizjournals.com
San Antonio-based Abraxas Petroleum (NASDAQ: AXAS) owns a 48 percent limited partner stake in Abraxas Energy. The remaining 52 percent of Abraxas Energy is owned by private investors. Abraxas Petroleum reached an agreement with those outside investors...
PetroChina Completes S$1.47B Singapore Petroleum Stake Buy - Wall Street Journal
(PTR) said Sunday it completed the purchase of a 45.51% stake in Singapore Petroleum Co. (S99.SG) and will make a mandatory offer to buy the shares in the company it doesn't already own. The Hong Kong-listed oil producer said it will offer to acquire...
OIL FUTURES: Crude To Take Cues From FOMC, US Oil Inventories - Wall Street Journal
By Wayne Ma Figures released overnight by the American Petroleum Institute showed a weaker-than-expected drawdown of crude stocks, along with a larger-than-expected build in gasoline stocks. The API and EIA numbers have been similar these past few...
Ultra Petroleum Closed At Two-Month Low Monday - Trading Markets (press release)
(RTTNews) - Ultra Petroleum Corp. (UPL | Quote | Chart | News | PowerRating) gapped open lower Monday and declined for the majority of the morning. The stock settled into a range in the afternoon and closed down by $4.49 at $39.12 on the highest volume...
TransAtlantic Petroleum Concludes C$162 Mln Equity Offering ... - RTT News
(RTTNews) - TransAtlantic Petroleum Corp. (TNP.TO: News , TAPFF.OB) said it closed public offering of 98.38 million common shares of the company at a price of C$1.65 per common share for gross proceeds of about C$162 million....
Nitro Petroleum Incorprated Purchases Working Interest in Bigoray ... - SYS-CON Media (press release)
OKLAHOMA CITY, OKLAHOMA -- (Marketwire) -- 06/22/09 -- Nitro Petroleum Incorporated (OTCBB: NTRO) is pleased to announce that it has finalized the purchase of a working interest in two gas wells in the Bigoray area of West Central Alberta....

Ministry of Petroleum of Iran

Coat of arms of Iran.svg

The Iranian constitution prohibits the granting of petroleum rights on a concessionary basis or direct equity stake. However, the 1987 Petroleum Law permits the establishment of contracts between the Ministry of Petroleum, state companies and "local and foreign national persons and legal entities." Buyback contracts, for instance, are arrangements in which the contractor funds all investments, receives remuneration from the National Iranian Oil Company (NIOC) in the form of an allocated production share, then transfers operation of the field to NIOC after a set number of years, at which time the contract is completed.

NIOC controls huge deposits of crude oil from which over 130.798 billion barrels (2.07952×1010 m3) can be exploited in the form of primary and secondary recoveries. Iran is the fourth largest oil producer in the world after the United States and OPEC's second largest exporter. During 2005, Iran produced about 4.24 Mbbl/d (674,000 m³/d) of total liquids. Of this, 3.94 Mbbl/d (626,000 m³/d) is crude oil, roughly 5 percent of world crude production. Iran's current sustainable crude oil production capacity is estimated at 3.8 Mbbl/d (600,000 m³/d), which is around 310,000 bbl/d (49,000 m³/d) below Iran's latest (July 1, 2005) OPEC production quota of 4.110 Mbbl/d (653,400 m³/d).

The huge reserves of natural gas put Iran in the second place, in terms of the natural gas reserve quantity, among other countries, only next to the Russian Federation, with an estimate of proven reserve quantity close to 23 bcm. There are, at present, eight refineries —with a potential capacity of 950,000 barrels per day (151,000 m³/d) and one refinery complex in the country with a total refining capacity of over 1,5 mb/d (in Tehran, Tabriz, Isfahan, Abadan, Kermanshah, Shiraz, Bandar Abbas, Arak and Lavan Island) and a storage capacity of 8 milliard litre. Abundance of basic material, like natural gas, in the country provide favorable conditions for development and expansion of petrochemical plants.

Thus National Iranian Petrochemical Company (NIPC) has succeeded in the recent years in producing a wide range of petrochemicals and increasing its production, in terms of quantity, to a new level.

In 2001 Iran’s already sizable oil reserves were bolstered by the discovery of a large new offshore field near Abadan at the head of the Persian Gulf. However, oil recovery percentages in existing fields lagged in the early 2000s. The largest natural gas field is South Pars, discovered in 1988 in southern Iran and under intensive development in the early 2000s.

Iran currently produces about 4 million barrels (640,000 m3) of oil per day, of which only 2.5 million barrels (400,000 m3) are exported with the remaining 1.5-million-barrel (240,000 m3) being consumed internally. According to the latest report (26 Dec 2006) by the National Academy of Sciences of the United States (NAS), if the current increase in local Iranian oil consumption continues and the current decline in oil production is not stopped, then by 2015 Iran’s oil export will decline to zero. According to this and other reports Iran needs to invest about $2.5 billion a year just to stand still. Iran is not running out of oil, but needs money to maintain old fields and bring in the new fields online. More recently, Oil Minister Gholam Hossein Nozari said Iran plans to invest $500 billion in the oil sector until 2024.

Despite the sanctions, Iran continued to attract foreign investment and technical cooperation for its energy sector. Countries such as France, Japan, Italy, Norway, UK, Brazil, Malaysia, Spain, Holland, China, Russia, and others took advantage of absence of the American competition and tried to fill the gap. However, the threat of American retaliation kept the investment way below the desired levels. It only allowed Iran to continue to keep its oil export at its OPEC determined quota level.

The amount of foreign investments made in Iran's oil industry showed a 9.1 percent growth in the last Iranian calendar year (ended March 19, 2007). Over$14.2 billion worth of foreign investments was made in the oil industry in the period 2006-2007 with the National Iranian Oil Refining and Distribution Company (NIORDC) attracting most of the amount.

In October 2008, in Tehran, the Gas Exporting Countries’ Forum (GECF) agreed to form a cartel. Russia, Iran, and Qatar announced that they intend to form a yet-unnamed group to "coordinate gas policy." The Group of Three (the "troika") will meet quarterly to coordinate and exercise control over close to two-thirds of the world’s gas reserves and a quarter of all gas production. To compare, the Organization of Petroleum Exporting Countries (OPEC) controls more than three-quarters of the world’s oil reserves but only 40% of global production. According to Valery Yazev, the head of the Russian parliament's energy committee and the Russian Gas Union industry group, the cartel could be joined by Turkmenistan, Kazakhstan, Uzbekistan, Ukraine and Belarus. The founding fathers of the "gas OPEC" as it sometimes referred to, are Iran, Russia, Qatar, Venezuela and Algeria. Members of the Gas Exporting Countries Forum include Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Oman, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates and Venezuela. Norway is an observer.

Iran has one of the cheapest gas prices in the world: 8 cents per liter (33 cents per gallon) while mineral water sells for 13 cents a liter, because the government subsidies many basic commodities, including gasoline, totalling more than $100 billion per year (2007/2008) - $7 billion worth of gasoline imports as of 2006 alone, because of lack of domestic refining capacity. Iran has also one of the highest gas consumption per capita in the world because of contraband with neighboring countries and public waste (domestic consumption increasing 10% per year). This problem of dependency on imports has also national security ramifications because of possible sanctions on gasoline imports.

Experts agree that oil is a pollutant and that its usage should be made as efficient as possible and not wasted because encouraged/incentived through subsidies. The same holds true for electricity (power wastage hit $1.1 billion in 2006), water, wheat, pharmaceuticals and other commodities like cement and steel and for the same set of reasons. Consequently, Iran has become a net importer of gasoline (in 2006, 40% of Iran's daily 70 million liters of gasoline consumption was imported).

These subsidies also create an environment in which manufacturers become complacent and not only do not conserve energy in their production activities, but also do not try to build energy efficient appliances and machines; simply because their consumers do not pay attention to the product's energy consumption. Based on energy consumption, Iranian made cars, freezers, refrigerators, etc. will not be able to compete with the similar sized Japanese, American or European products.

Also contributing to the problem greatly, arbitrage opportunities, resulting from the difference between Iran's subsidized price and the market price abroad, through smuggling with other countries, has considerably aggravated the shortage of gasoline in Iran, diminished its exports of crude oil, and illegally drained/stolen huge financial resources (counted in billions of dollars per year) from the government coffers (treasury - people's money that is) into private bank accounts abroad. No arrest has been made public to this day by the judiciary regarding the identity of the peoples responsible for this massive theft of the public property. In that context, it is possible that part of the "imported" gasoline has never been delivered to the Iranians. Meaning that it is solely an accounting transaction through the use of falsified documents (ie, no physical delivery of the commodity but transfer of the payment and subsidies to those people who handle these matters at the Ministry of Petroleum.)Iran says its naval security forces have confiscated ten oil tankers smuggling 4,600 tons of Iranian fuel out of the Persian Gulf in 2008. Fuel smuggling has increased by 232 percent compared to last year's figures.

Besides, studies have shown repeatedly that subsidies for gasoline mostly benefit the higher income strata of the population because they are the ones who can afford to drive cars or who can profit by using it as an input in their (export) businesses (eg. transportation or petrochemicals) . Therefore, it is advisable to ban gasoline subsidies altogether and transfer the subsidy amounts directly to the population equally or to the population who needs it specifically. A census is currently under way but, strangely, statistics regarding income levels have been discarded in the questionnaire. This precious information regarding who needs help in Iran can still be collected while the government distributes "justice shares", which are shares of state-owned enterprises being privatized given to low income Iranians, because they will have to justify (prove) their low income levels to the authorities at that time. In 2007, Iran had 12 million people living below the poverty line. Six million of these people were not supported by any foundation or organization.

The rationing system is scheduled to last 4-6 months during its first phase.

A new plan is under discussion (December 2008). According to those who are preparing the plan, energy subsidies would be deposited in the account of the beneficiary in cash in the first phase of the project. And gradually, the rich will be left out of the energy subsidy plan. In subsequent phases, the plan will include the subsidies for staple goods such as wheat and bread.

It must be noted that even if the government does not plan to target low-income Iranians for the subsidies, experts agree that in the worst case scenario (the present situation that is), it would make more sense to distribute the same amount of subsidies in the Government's budget (if not more) to the entire population equally and directly through cash payments. That would be $400 US per adult per year in 2006 for gasoline alone when the average annual salary in Iran is $2,700 US ($1,400 per person, including children, per year when including other subsidies/commodities for 2008. That means $5600 for a family of four in 2008!); instead of implementing a two-tier payment system that can be technically defrauded, so as to avoid the real cost incured by the underprivileged, general population and the government because of contraband, waste and over-consumption among other reasons cited above . This is the easiest and most efficient solution because inflation would increase by the same amount or much less than the purchasing power of the Iranian consumers, because of the cash transfer from the government to the Iranian people as described above (from previously budgeted subsidies). This, above the transfer from the thieves to the Iranian people (from the proceeds of the smuggling activity). However subsidies must be suppressed simultaneously for all 3 sources of energy (gasoline, gas and electricity) otherwise there will be a new arbitrage opportunity created for speculators and businessmen between these 3 sources of energy. Therefore it is not even a problem that the measure would be unpopular for the rulers, if things are explained properly to the population and implemented (quite the opposite!). These subsidies are de-facto a massive and illegal transfer of wealth - counted in billions of dollars per year - from the people of Iran to the pockets of the ruling class/mafia, but falsely disguised as "economic help/assistance" to the Iranian people and this is the only real reason why they are kept in place.

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Extraction of petroleum

Pumpjack on an oil well in Texas

The extraction of petroleum is the process by which usable petroleum is extracted and removed from the earth.

Nowadays, geologists use seismic surveys to search for geological structures that may form oil reservoirs. The "classic" method includes making underground explosion nearby and observing the seismic response that provides information about the geological structures under the ground . However, "passive" methods that extract information from naturally-occurring seismic waves are also known .

Other instruments such as gravimeters and magnetometers are also sometimes used in the search for petroleum. When extracting crude oil, it normally starts by drilling wells into the underground reservoir. When an oil well has been tapped, a geologist (known on the rig as the "mudlogger") will note its presence. Historically, in the USA, some oil fields existed where the oil rose naturally to the surface, but most of these fields have long since been used up, except certain places in Alaska. Often many wells (called multilateral wells) are drilled into the same reservoir, to ensure that the extraction rate will be economically viable. Also, some wells (secondary wells) may be used to pump water, steam, acids or various gas mixtures into the reservoir to raise or maintain the reservoir pressure, and so maintain an economic extraction rate.

During the primary recovery stage, reservoir drive comes from a number of natural mechanisms. These include: natural water displacing oil upward into the well, expansion of the natural gas at the top of the reservoir, expansion of gas initially dissolved in the crude oil, and gravity drainage resulting from the movement of oil within the reservoir from the upper to the lower parts where the wells are located. Recovery factor during the primary recovery stage is typically 5-15%.

While the underground pressure in the oil reservoir is sufficient to force the oil to the surface, all that is necessary is to place a complex arrangement of valves (the Christmas tree) on the well head to connect the well to a pipeline network for storage and processing.

Over the lifetime of the well the pressure will fall, and at some point there will be insufficient underground pressure to force the oil to the surface. After natural reservoir drive diminishes, secondary recovery methods are applied. They rely on the supply of external energy into the reservoir in the form of injecting fluids to increase reservoir pressure, hence replacing or increasing the natural reservoir drive with an artificial drive. Sometimes pumps, such as beam pumps and electrical submersible pumps (ESPs), are used to bring the oil to the surface. Other secondary recovery techniques increase the reservoir's pressure by water injection, natural gas reinjection and gas lift, which injects air, carbon dioxide or some other gas into the reservoir. Typical recovery factor from water-flood operations is about 30%, depending on the properties of oil and the characteristics of the reservoir rock. On average, the recovery factor after primary and secondary oil recovery operations is between 30 and 50%.

Tertiary oil recovery reduces the oil's viscosity to increase oil production. Thermally enhanced oil recovery methods (TEOR) are tertiary recovery techniques that heat the oil and make it easier to extract. Steam injection is the most common form of TEOR, and is often done with a cogeneration plant. In this type of cogeneration plant, a gas turbine is used to generate electricity and the waste heat is used to produce steam, which is then injected into the reservoir. This form of recovery is used extensively to increase oil production in the San Joaquin Valley, which has very heavy oil, yet accounts for 10% of the United States' oil production. In-situ burning is another form of TEOR, but instead of steam, some of the oil is burned to heat the surrounding oil. Occasionally, detergents are also used to decrease oil viscosity as a tertiary oil recovery method.

Another method to reduce viscosity is carbon dioxide flooding.

Tertiary recovery allows another 5% to 15% of the reservoir's oil to be recovered.

Tertiary recovery begins when secondary oil recovery isn't enough to continue adequate production, but only when the oil can still be extracted profitably. This depends on the cost of the extraction method and the current price of crude oil. When prices are high, previously unprofitable wells are brought back into production and when they are low, production is curtailed.

The amount of oil that is recoverable is determined by a number of factors including the permeability of the rocks, the strength of natural drives (the gas present, pressure from adjacent water or gravity), and the viscosity of the oil. When the reservoir rocks are "tight" such as shale, oil generally cannot flow through but when they are permeable such as in sandstone, oil flows freely. The flow of oil is often helped by natural pressures surrounding the reservoir rocks including natural gas that may be dissolved in the oil (see Gas oil ratio), natural gas present above the oil, water below the oil and the strength of gravity. Oils tend to span a large range of viscosity from liquids as light as gasoline to heavy as tar. The lightest forms tend to result in higher production rates.

The oil well is created by drilling a hole into the earth with an oil rig. A steel pipe (casing) is placed in the hole, to provide structural integrity to the newly drilled wellbore. Holes are then made in the base of the well to enable oil to pass into the bore. Finally a collection of valves called a "Christmas Tree" is fitted to the top, the valves regulating pressures and controlling flows.

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Petroleum in Nigeria

View of Niger Delta from space.

The extraction and drilling of petroleum in Nigeria is the largest industry and main generator of GDP in the West African nation which is also the continent's most populous. Since the British discovered oil in the Niger Delta in the late 1950s, the oil industry has been marred by political and economic strife largely due to a long history of corrupt military regimes and complicity of multinational corporations, notably Royal Dutch Shell. Despite this, it was not until the early 1990s that the situation was given international attention, particularly following the murder by the Nigerian state of playwright and activist Ken Saro-Wiwa, provoking the immediate suspension of Nigeria from the Commonwealth of Nations. Nigeria is identified by the international community and the firms in operation there as a major concern with regards to human rights and environmental degradation. The Nigerian government, oil corporations, and oil-dependent Western countries have been criticized as too slow to implement reforms aimed at aiding a desperately under-developed area and remediating the unsustainable environmental degradation that petroleum extraction has wrought.

As of 2000, oil and gas exports accounted for more than 98% of export earnings and about 83% of federal government revenue, as well as generating more than 40% of its GDP. It also provides 95% of foreign exchange earnings, and about 65% of government budgetary revenues.

Nigeria's proven oil reserves are estimated by the U.S. United States Energy Information Administration (EIA) at between 16 and 22 billion barrels (3.5×109 m3), but other sources claim there could be as much as 35.3 billion barrels (5.61×109 m3). Its reserves make Nigeria the tenth most petroleum-rich nation, and by the far the most affluent in Africa. In mid-2001 its crude oil production was averaging around 2.2 million barrels (350,000 m³) per day.

Nearly all of the country's primary reserves are concentrated in and around the delta of the Niger River, but off-shore rigs are also prominent in the well-endowed coastal region. Nigeria is one of the few major oil-producing nations still capable of increasing its oil output and unlike most of the other OPEC countries, Nigeria is not projected to exceed peak production until at least 2009. The reason for Nigeria's relative unproductivity is primarily OPEC regulations on production in order to regulate prices on the international market. More recently, production has been forced to a halt intermittently by the demands and actions of the Niger Delta's inhabitants who feel they are being exploited.

Nigeria has 159 total oil fields and 1481 wells in operation according to the Ministry of Petroleum Resources. The most productive region of the nation is the coastal Niger Delta Basin in the Niger Delta or "South-south" region which encompasses 78 of the 159 oil fields. Most of Nigeria's oil fields are small and scattered, and as of 1990, these small unproductive fields accounted for 62.1% of all Nigerian production. This contrasts with the sixteen largest fields which produced 37.9% of Nigeria's petroleum at that time. As a result of the numerous small fields, an extensive and well-developed pipeline network has been engineered to transport the crude. Also due to the lack of highly productive fields, money from the jointly operated (with the federal government) companies is constantly directed towards petroleum exploration and production.

Much of Nigeria's petroleum is classified as "light" or "sweet", meaning the oil is largely free of sulphur. Nigeria is the largest producer of sweet oil in OPEC. This sweet oil is similar in constitution to petroleum extracted from North Sea. This crude oil is known as "Bonny light". Names of other Nigerian crudes, all of which are named according to export terminal, are Qua Ibo, Escravos blend, Brass river, Forcados, and Pennington Anfan.

In terms of exportation, the U.S. remains Nigeria's largest customer for crude oil, accounting for 40% of the country's total oil exports; Nigeria provides about 10% of overall U.S. oil imports and ranks as the fifth-largest source for U.S. imported oil.

There are six petroleum exportation terminals in the country, Shell owns two, while Mobil, Chevron, Texaco, and Agip own one each. Shell also owns the Forcados Terminal, which is capable of storing 13 million barrels (2,100,000 m3) of crude oil in conjunction with the nearby Bonny Terminal. Mobil operates primarily out of the Qua Iboe Terminal in Akwa Ibom State, while Chevron owns the Escravos Terminal located in Delta State and has a storage capacity of 3.6 million barrels (570,000 m3). Agip operates the Brass Terminal in Brass, a town 113 km southwest of Port Harcourt and has a storage capacity of 3,558,000 barrels (565,700 m3). Texaco operates the Pennington Terminal.

An industry that is developing and has potential to strengthen the future for oil extraction in Africa is deepwater production. This is mainly underwater oil drilling that exists 400 m or more below the surface of the water. By expanding to deep water drilling the possible sources for finding new oil reserves is expanded. Through the introduction of deep water drilling 50% more oil is extracted than before the new forms of retrieving the oil . Angola and Nigeria are the largest oil producers in Africa. In Nigeria the deepwater sector still has a large avenue to expand and develop. The amount of oil extracted from Nigeria is expected to expand from 15,000 bbl/d (2,400 m³/d) in 2003 to 1.27 Mbbl/d (202,000 m³/d) in 2010 . Deepwater drilling for oil is especially attractive to oil companies because the Nigerian government has very little share in these activities, so it is hard for them to place restrictions and regulations on the companies . Also, the deepwater extraction plants limit the amount of interruptions in production by local militant attacks, seizures due to civil conflicts, and sabotage . These advancements offer more resources and alternatives to extract the oil from the Niger Delta, with hopefully less conflict than the operations on land.

Natural gas reserves are well over 100 trillion ft³ (2,800 km³), the gas reserves are three times as substantial as the crude oil reserves. The biggest natural gas initiative is the Nigerian Liquified Natural Gas Company, which is operated jointly by several companies and the state. It began exploration and production in 1999. Chevron is also attempting to create the Escravos Gas Utilization project which will be capable of producing 160 million standard ft³ of gas per day.

There is also a gas pipeline, known as the West African Gas Pipeline, in the works but has encountered numerous setbacks. The pipeline would allow for transportation of natural gas to Benin, Ghana, Togo, and Cote d'Ivoire. The majority of Nigeria's natural gas is flared off and it is estimated that Nigeria loses 18.2 million USD daily from the loss of the flared gas.

Nigeria's total petroleum refining capacity is 445 million barrels per day (70,700,000 m³/d), however, only 240,000 bbl/d (38,000 m³/d) was allotted during the 1990s. Subsequently crude oil production for refineries was reduced further to as little as 75,000 bbl/d (11,900 m³/d) during the regime of Sanni Abacha. There are four major oil refineries: the Warri Refinery and Petrochemical Plant which can process 125 million barrels (19,900,000 m3) of crude per day, the New Port Harcourt Refinery which can produce 150 million barrels per day (24,000,000 m³/d) (there is also an 'Old' Port Harcourt Refinery with negligible production), as well as the now defunct Kaduna Refinery. The Port Harcourt and Warri Refineries both operate at only 30% capacity.

It is estimated that demand and consumption of petroleum in Nigeria grows at a rate of 12.8% annually. However, petroleum products are unavailable to most Nigerians and are quite costly, because almost all of the oil extracted by the multinational oil companies is refined overseas, while only a limited quantity is supplied to Nigerians themselves.

Prior to its official amalgamation into a singular nation by the military forces of the British Empire in 1914, the territory of Nigeria was a loose collection of autonomous states, villages, and ethnic communities. Many of these established themselves as pillars of art, trade, and politics in West Africa as late as the 1800s; four of these cultural entities, the Hausa-Fulani,the Igbo (sometimes spelled Ibo), the Yoruba and the Efik grew extremely prominent in the region before the arrival of foreigners, dictated British colonial policies, and dominate national politics in Nigeria to this day.

The modern Hausa and Fula societies in northern Nigeria are the cultural successors of the Sokoto Caliphate, a theocratic state founded by Muslim reformer empire-maker Uthman dan Fodio in 1817. Geographically isolated in the north, the Caliphate was governed by Islamic laws as prescribed by dan Fodio's Kitab al-Farq and maintained greater links commercially and culturally to North Africa and the Arab states than to West Africa and the Atlantic.

By contrast, the Yoruba, the Igbo and the Efik in the south had regularly experienced contact with Europeans since at least the 1500s. A minority of southerners converted to Christianity even prior to the establishment of permanent British control; the majority followed traditional indigenous religions, worshipping myriad deities with vast domains spanning both cosmic and terrestrial spheres. Coastal Nigerians established thriving trade both regionally and abroad, fashioning the coast into a hub for products like palm oil, a good sought after by rapidly industrializing Europe, while also serving as key source for the slave trade prior to its international banning (the region came to be known as the Slave Coast as a result).

The Niger Delta region, which is roughly synonymous with the Niger Delta province in location and the contemporary heart of the petroleum industry, is and was a zone of dense cultural diversity and is currently inhabited by roughly forty ethnic groups speaking an estimated 250 dialects. Some of the more relevant ethnic groups in the western part of the Niger Delta region include the Ijaw, Itsekiri, and Ogoni. The Ijaw (sometimes spelled Ijo), the fourth most populous tribe in Nigeria and by far the largest in the Delta region, lived during late medieval times in small fishing villages within the inlets of the delta; however by the sixteenth century, as the slave trade grew in importance, Ijaw port cities like Bonny and Brass developed into major trading states which served as major exporters of fish and other goods regionally. Other states such as the those of Itsekiri domain of Warri sprang up at this time as well.

The eastern Niger Delta region has the Efik people (Annang / Efik / Ibibio who are all related with a common language and ancestors were all referred to as Efik or Calabar people in early Nigerian history). Their capital city at Calabar located at the coastal southeast of Nigeria (eastern Niger Delta) served as the major trading and shipping center during the pre-colonial and colonial period. Calabar also served first capital of Nigeria and the point of entry of Western religion and Western education into southeastern Nigeria. The combined population of the Ibibio, Annang and Efik people is the fourth largest language group in Nigeria.

Even before the consolidation of British control over all of present day Nigeria's borders in 1914 from the protectorates of Southern and Northern Nigeria, British forces had begun imposing drastic political and economic policies on the Nigerian people which would lead to important consequences in the future. Originally this was done primarily through the government-owned Royal Niger Company. The company was crucial in securing most of Nigeria's major ports and monopolized coastal trade; this resulted in the severing of ties which linked the area to the flourishing West African regional trade network, in favor of the exportation of cheap natural resources and cash crops to industrializing nations. Most of the population eventually abandoned food production for such market-dependent crops (peanuts and cotton in the north, palm oil in the east, and cocoa in the west). From the beginning divide and rule tactics were employed by both traders and administrators by highlighting ethno-religious differences and playing groups against one another. After the 1914, the north was permitted a system of indirect rule under authoritarian leaders, while in the south the British exercised control directly.

Interest in Nigerian oil originated in 1914 with an ordinance making any oil and mineral under Nigerian soil legal property of the Crown. By 1938 the colonial government had granted the state-sponsored company, Shell (then known as Shell D'Arcy) monopoly over exploration of all minerals and petroleum throughout the entire colony. Commercially viable oil was discovered by Shell roughly 90 km west of the soon-to-be oil capital of Port Harcourt at Oloibiri (now in Bayelsa State) in 1956; initially a 50-50 profit sharing system was implemented between the company and the government. Until the late 1950s concessions on production and exploration continued to be the exclusive domain of the company, then known as Shell-British Petroleum. However, other firms became interested and by the early 1960s Mobil, Texaco, and Gulf had purchased concessions.

In October 1960 Nigeria gained full independence from Britain with the British monarch continuing to preside as Head of State, but the country quickly altered its relationship with its former colonizers by declaring Nigeria a republic of three federated states (the Eastern, Western and Northern Regions). But the flaring of ethnic tensions assured that this new republic would be short-lived, as on January 15, 1966, a small group of army officers consisting mostly southeastern Igbos, staged a successful coup d'etat against the civilian government. This federal military government which assumed power under General Aguiyi-Ironsi, was unable to quiet ethnic tensions or produce a constitution acceptable to all sections of the country. In fact, its efforts to abolish the federal structure exacerbated the growing unrest and led to another coup, led by largely northern officers in July of the same year. This second coup established the regime of Major General Yakubu Gowon. Subsequently, the massacre of thousands of Igbo in the north prompted hundreds of thousands to return to the southeast, where increasingly strong Igbo secessionist sentiment emerged under the leadership of the Igbo military governor Lieutenant Colonel Chukwuemeka Odumegwu Ojukwu.

With tensions stoked between the Eastern region and Gowon's federal government, on 4-5 January 1967, in compliance with Ojukwu's desire to meet for talks only on neutral soil, a summit attended by Gowon, Ojukwu and other members of the Supreme Military Council was held at Aburi in Ghana, the stated purpose of which was to resolve all outstanding conflicts and establish Nigeria as a confederation of regions. The outcome of this summit was the Aburi Accord, the differing interpretations of which would soon cause Ojukwu to declare Biafran independence and plunge Nigeria into civil war.

Igbo secessionism arose in part from political isolation during the years following independence, as the Eastern Region increasingly found itself having to compete against both the Yoruba-dominated west and Hausa-dominated north. However, since the southeast encompassed most of the petroleum-rich Niger Delta, the prospect emerged of the Eastern Region gaining self-sufficiency and increasing prosperity. The exclusion of easterners from power caused many in the east to fear that oil revenues would be used to benefit areas in the north and west rather than their own. The desire to accrue profits from oil revenues combined with ethnic tensions acted as a catalyst for the Igbo-spearheaded secession. Additionally, despite his denials in later years, it appears that Ojukwu's insistence on secession at the time was heavily influenced by his knowledge of the extent of the area's oil reserves.

On top of scores of deaths, the war had a largely negative impact on the oil industry. Strife caused production of crude to drop significantly, particularly in Biafra. Total crude output decreased from 420 million barrels per day (67,000,000 m³/d) in 1966 at the start of the war, to only 140,000 bbl/d (22,000 m³/d) in 1968. Shell alone saw a drop from 367,000 bbl/d (58,300 m³/d) in 1966, to 43,000 in 1968. And in addition to concerns about production, oil companies began experiencing uncertainty as to the future of their investments depending on who prevailed in the war. This led to relations between oil companies and the federal government becoming strained, with the government at one point accusing the oil company Safrap (now TotalFinaElf, but Elf until 1974) of favoring Biafra and enlisting the aid of France for the Biafran cause. Shell, the other major holder of concessions in the southeast, was concerned but placated and limited politically by Britain's staunch support of the Nigerian government in the war effort.

Despite oil's prominent role in national affairs, up to this time, the Nigerian federal government had only limited involvement in the oil industry, and the government confined its financial involvement in the oil industry to taxes and royalties on the oil companies. The companies were subsequently able to set their own price on the petroleum they extracted, and dominated petroleum to such a point that laws governing the oil sector were having a negative effect on Nigerian interests. However, even during the conflict with Biafra would force changes to the relationship between federal government and the petroleum industry. Gowon's military government instituted the 1969 Petroleum Decree which dismantled the existing revenue allocation system that had divided revenue from oil taxes equally between federal and state government, instead favoring an allocation formula in which the federal government controlled the dispensation of revenues to the states.

After the loss of 300,000 lives, the war concluded in 1970 and resulted in a victory for the Nigerian state, as the secessionist regions were subsequently brought back into the Nigerian fold. However, the former Eastern Region had been split into two new states, Rivers and South-Eastern (now Cross River) in order to discourage lingering ideas of independence. Following the war, Delta peoples and their lands, with their vast petroleum reserves came to be seen by many in the Nigerian government as colonies of sorts. As a result these groups, notably the Igbo, have to an extent been marginalized in Nigerian politics since this time, whilst Nigeria's long line of military rulers have reaped immense profits from their land. Indeed, Nigeria has not had an Igbo head of state since the war's end.

In May 1971 the Nigerian federal government, then under the control of General Yakubu Gowon, nationalized the oil industry by creating the Nigerian National Oil Corporation via a decree. Following the war with Biafra, the government felt it necessary to secure and gain more control over the oil industry. Nationalization of the oil sector was also precipitated by Nigeria's desire to join OPEC, which required that member states acquire 51% stake and become increasingly involved in the oil sector. Although the Nigerian government had maintained involvement in the industry prior to 1971, this was accomplished mainly through business deals on concessions of the foreign firms in operation. The creation of the NNOC made government participation in the industry legally binding. The federal government would continue to consolidate its oil involvement throughout the next several decades.

However, it was during the years of Gowan and his successors Murtala Mohammed and Olusegun Obasanjo known officially as the Heads of the Federal Military Government of Nigeria,who ruled amidst the oil boom of the 1970s that the political economy of petroleum in Nigeria truly became characterized by endemic patronage and corruption by the political elites, which plagues the nation to this day. At both state and federal government levels, power and therefore wealth has typically been monopolized by select interest groups who maintain a strong tendency to 'look after their own' by financially rewarding their political supporters. At the state or community level this means that interest groups in power will reward and protect their own; this is typically based on ethnic/tribal or religious affiliation of the interest group. The heavy patronage based on tribal affiliation has fueled ethnic unrest and violence throughout Nigeria, but particularly in the Niger Delta states, where the stakes for control of the immense oil resources are very high. At the federal level, political elites have utilized patronage to consolidate power for the ruling government, not only by rewarding their political friends in the federal government, but also by paying off major interest groups at the state or tribal level in order to elicit their cooperation. Inevitably these financial favors are distributed unequally and inefficiently, resulting in concentration of wealth and power in the hands of a small minority. Nigeria is in fact ranked by the Corruption Perceptions Index as the sixth (ranked 152 out of 159 countries surveyed) most corrupt nation on Earth and maintains the second lowest ranking in Africa, ahead of only Chad.

1974: Participation in oil industry by government increases to 55 percent.

1975: Decree 6 increases federal government share in oil sector to 80%, with only 20% going to states.

1976: First exploration and development venture by NNOC undertaken and drills to uncover commercial quantities of petroleum off-shore.

1978: Perhaps most importantly, the federal government created the Land Use Act which vested control over state lands in control of military governors appointed by the federal military regime, and eventually led to Section 40(3) of the 1979 constitution which declared all minerals, oil, natural gas, and natural resources found within the bounds of Nigeria to be legal property of the Nigerian federal government.

1979: In an effort to establish further control over the industry, the government merges and restructures the NNOC and the Ministry of Petroleum to form the Nigerian National Petroleum Corporation, an entity which would exert more power over the allocation and sale of concessions than the NNOC. By 1979, the NNPC had also gained 60 percent participation in the oil industry.

Despite the vast revenues accrued by Gowon and his heirs, the junta still managed to succumb to the demands of the civilian population, and in 1979 military head of state Olusegun Obasanjo handed over power to elected National Party of Nigeria (NPN) candidate Shehu Shagari. This event coincided with the declaration of Nigeria's Second Republic. At this juncture, the oil producing states of the Niger Delta were accounting for 82% of all federal government revenue but the population of these areas received very little compensation and demands for adequate reimbursement for the black gold extracted from their land could be heard at this time. Overall, petroleum accounted for 96% of all government external revenue but a mere 27% of the nation's GDP. However, the conversion to democracy would not improve the situation.

A 1982 Revenue Act implemented by the Shagari government would eventually be modified by yet another military regime in 1984 via Decree 36 which reduced government share of oil revenue from 80% to 55%. 32.5% go to states and 10% to local governments. The remaining 1.5% was earmarked as a special fund to develop oil producing areas, however, it was during the Shagari regime that corruption in Nigerian governance reached its zenith and capital flight out of Nigeria peaked, while the oil-producing peoples continued to receive little to no share of the oil profits Additionally, 1980 saw oil-generated revenues attain an all-time climax of US $24.9 billion but Nigeria still managed an international debt of $9 billion.

Shagari's NPN government was viewed by the majority of Nigerians as incorrigibly corrupt by the time the national elections of 1983 came about. Shagari and his subordinates steadily transformed Nigeria into a police state where Nigerian military and police forces were permitted to utilise force quite liberally in order to control the civilian population. Such repressive measures were employed to ensure victory in the forthcoming elections, and this outcome was achieved largely through the bankrupting of the federal government's treasury.

Another disturbing trend had also been gaining steam in Nigeria since the early 1970s: a steep drop in agricultural production correlating roughly with the rise in federal revenues from petroleum extraction. Whereas previously Nigeria had been the world's lead exporter of cocoa, production of this cash crop dropped by 43%, while productivity in other important income generators like rubber (29%), groundnuts (64%), and cotton (65%) plummeted as well between 1972 and 1983. The decline in agricultural production was not limited to cash crops amid the oil boom, and national output of staple foodstuffs fell. This situation contrasts to Nigeria in 1960 just after independence, when despite British underdevelopment, the nation was more or less self-sufficient in terms of food supply, while crops made up 97% of all revenue from exports. The drop in production was so substantial that by the early 1980s the NPN government was forced to implement a now notorious import license scheme which essentially involved Nigeria, for the first time in its history, importing basic food items. However, as Nigerian activist and Nobel Laureate Wole Soyinka asserts, "the import license scam that was used by the party as a reward and enticement for party loyalists and would-be supporters cost the nation billions of dollars...while food production in the country virtually ceased".

For these reasons, seizure of power by General Muhammadu Buhari a short time after the NPN government was fraudulently re-elected was initially perceived as a positive development by civilians. Buhari charged out of the gate in December 1983, declaring himself Head of the Supreme Military Council of Nigeria, he condemned the civlian government's blatant corruption and instituted programs supposedly designed to eliminate the disease of corruption. However, these measures were largely transparent and the looting of federal coffers by Nigeria's rulers continued largely unabated, "as Shagari's officers - both within party and government - left the country, came in and out as they pleased, while Burahi's tribunal sentence opposition figures to spells of between a hundred and three hundred years in prison for every dubious kind of crime". The Buhari government neglected to punish even Shagari himself, a consistent trend in Nigerian's long line of dictariorial rulers, who almost universally been spared any kind of justice.

In 1985, another general, this time General Ibrahim Babangida, stole power and again alleged that his predecessors were corrupt violators of human rights and promised to rectify the situation, committing to a return to democracy by 1990. Nigeria had been saddled with a crushingly large international debt at this point. This was because, despite over 101 billion US dollars having been generated by the oil industry between 1958 and 1983, nearly all of these funds had been siphoned into the private bank accounts and the state sponsored pet projects maintained by the succession of Nigerian governmental elites.

Immediately prior to Babangida's rise to power, which is viewed by some as having been orchestrated by international oil and banking interests, the International Monetary Fund was exerting increasingly acute pressure on the Nigerian government to repay its massive debts, of which 44% of all federal revenue was already servicing. Therefore, it was unsurprising when Babangida implemented the IMF's Structural Adjustment Program in October 1986 in order to facilitate debt repayment. The SAP was extremely controversial while it was in effect between 1986 and 1988. While it did permit Nigerian exports to become more competitive internationally and spurred a degree of economic growth, the SAP also incurred a dramatic drop in real wages for the majority of Nigerians. This, combined with major cuts to important public services, incited public unrest so extreme that Babangida's Armed Forces Ruling Council was obliged to partially reverse the SAP initiatives and return to inflationary economic policies. Babangida's rule also oversaw the annihilation of the Nigerian economic middle class, and Nigeria's entry to the Organization of the Islamic Conference, despite Muslims accounting for less than 50% of the Nigerian populace.

The 1980s military juntas conducted several attempted re-organisations of the NNPC to increase its efficiency. However, according to most sources by the early 1990s the NNPC was characterized by chronic inefficiency and waste. Red tape and poor organization are standard, with the NNPC being divided into several sub-entities, each fulfilling a particular function. This is despite the NNPC's growing participation in the industry, including development and exploration of numerous off-shore wells. As a result, the functionality of the industry is dependent on foreign corporations, not the NNPC.

The sudden jump in oil prices caused by the First Gulf War in 1990 and 1991, as most researchers confirm, was at best squandered. The Babangida junta has been widely accused of "mismanaging" the oil windfall from the Gulf War price jump, which accounted for about $12.5 billion in revenues. Another alleges that the federal government siphoned off about $12.2 billion between 1988 and 1994 into private accounts or expenditures, "clandestinely undertaken while the country was openly reeling with a crushing external debt".

Under these circumstances, Babangida eventually allowed for nationwide elections on June 12, 1993. These elections were declared universally free and fair (at least in comparison to past elections) by all major international election monitors, and the eventual winner of the presidential race was the Chief M.K.O. Abiola . However, the military regime cynically pronounced the election, in which fourteen million Nigerians participated, to be null and void due to "electoral irregularities". The Nigerian people took to the streets in large numbers to protest the election's annulment. As civil unrest continued, Babangida was forced to cede power to the caretaker government of Ernest Shonekan.

Shonekan's interim government would be short-lived, as on date, Babangida's former Chief of Army Staff and Minister of Defence Sani Abacha overthrew the caretaker regime and installed himself as Head of State. Popular opposition to the junta was widespread and public demonstrations were taking place on a regular basis. Immediately upon taking power, Abacha commenced the brutal repression of these subversive elements which would make his tenure notorious on a global basis.

Throughout the early 1990s such popular unrest grew steadily, particularly in the Niger Delta region, where various ethnic groups began demanding compensation for years of ecological damage as well as control over their land's oil resources. This unrest manifested itself at the outset as peaceful activist organisations that united their members on the basis of ethnicity.

One of the most prominent of these organisations to emerge in the region was the Movement for the Survival of the Ogoni People (MOSOP). The group declared that the Ogoni people, a small minority in Rivers state of Nigeria, were slowly being annihilated as the arable terrain of their homeland (known as Ogoniland) was degraded by pollution from oil production by Chevron and primarily Shell.

Conflict in the Niger Delta arose in the early 1990s due to tensions between the foreign oil corporations, the Nigerian federal government, and a number of the Niger Delta's ethnic groups who felt they were being exploited, particularly minority groups like the Ogoni as well as the Ijaw in the late 1990s. Ethnic and political unrest has continued throughout the 1990s and persists as of 2006 despite the conversion to a more democratic, civilian federal system under the Obasanjo government in 1999; democracy has to some degree fan the flames as politicians seeking office may now employ militia groups to coerce voters and generally disrupt the election process. Competition for oil wealth has fuelled violence between innumerable ethnic groups, causing the militarization of nearly the entire region by ethnic militia groups as well as Nigerian military and police forces (notably the Nigerian Mobile Police). Victims of crimes are fearful of seeking justice for crimes committed against them because of growing "impunity from prosecution for individuals responsible for serious human rights abuses, has created a devastating cycle of increasing conflict and violence". The regional and ethnic conflicts are so numerous that fully detailing each is impossible and impractical.

We witnessed the slow poisoning of the waters of this country and the destruction of vegetation and agricultural land by oil spills which occur during petroleum operations. But since the inception of the oil industry in Nigeria, more than twenty-five years ago, there has been no concerned and effective effort on the part of the government, let alone the oil operators, to control environmental problems associated with the industry.

Oil spills in Nigeria occur due to a number of causes which include: corrosion of pipelines and tankers (accounts for 50% of all spills), sabotage (28%), and oil production operations (21%, with 1% of the spills being accounted for by inadequate or non-functional production equipment. The largest contributor to the oil spill total, corrosion of pipes and tanks, is the rupturing or leaking of production infrastructures that are described as, "very old and lack regular inspection and maintenance". A reason that corrosion accounts for such a high percentage of all spills is that as a result of the small size of the oilfields in the Niger Delta, there is an extensive network of pipelines between the fields, as well as numerous small networks of flowlines—the narrow diameter pipes that carry oil from wellheads to flowstations—allowing many opportunities for leaks. In onshore areas, most pipelines and flowlines are laid above ground. Pipelines, which have an estimate life span of about fifteen years, are old and susceptible to corrosion. Many of the pipelines are as old as twenty to twenty-five years. Even Shell admits that "most of the facilities were constructed between the 1960s and early 1980s to the then prevailing standards. SPDC would not build them that way today." Shell operates the Bonny Terminal in Rivers State, which has reportedly been in operation for forty years without a maintenance overhaul; its original lifespan was supposed to be twenty five years.

Sabotage is performed primarily through what is known as "bunkering",whereby the saboteur attempts to tap the pipeline, and in the process of extraction sometimes the pipeline is damaged or destroyed. Oil extracted in this manner can often be sold for cash compensation.

The Nigerian National Petroleum Corporation places the quantity of oil jettisoned into the environment yearly at 2,500 cubic meters with an average of 300 individual spills annually. However, because this amount does not take into account "minor" spills, the World Bank argues that the true quantity of oil spilled into the environment could be as much as ten times the officially claimed amount. Among the largest individual spills include the blowout of a Texaco offshore station which in 1980 dumped an estimated 400 million barrels (64,000,000 m3) of crude into the Gulf of Guinea and Shell's Forcados Terminal tank failure which produced a spillage estimated at 580 million barrels (92,000,000 m3). One source projects that the total amount oil in barrels spilled between 1960 and 1997 is upwards of 100 million barrels (16,000,000 m3).

Oil spillage has a major impact on the ecosystem into which it is released. Immense tracts of the mangrove forests, which are especially susceptible to oil (this is mainly because it is stored in the soil and re-released annually with inundation), have been destroyed. An estimated 5-10% of Nigerian mangrove ecosystems have been wiped out either by settlement or oil. The rainforest which previously occupied some 7,400 km² of land has disappeared as well.

Spills in populated areas often spread out over a wide area, taking out crops and aquacultures through contamination of the groundwater and soils. Though the consumption of dissolved oxygen by bacteria feeding on the spilled hydrocarbons also contributes to the death of fishes. In agricultural communities, often a year's supply of food can be destroyed by only a minor leak, debilitating the farmers and their families who depend on the land for their livelihood. Drinking water is also frequently contaminated, and a sheen of oil is visible in many localized bodies of water. If the drinking water is contaminated, even if no immediate health effects are apparent, the numerous hydrocarbons and chemicals present in oil are highly carcinogenic. Although, people often do manifest sickness following consumption of polluted water.

Offshore spills, which are usually much greater in scale, contaminate coastal environments and cause a decline in local fishing production.

The decline in ecologic sustainability parallels the increase in oil production since operations began four decades ago. Furthermore, operating companies such as Shell have made public proposals for increasing production significantly in the near future which, because of the careless nature of oil operations in the Delta, will cause the environment to grow increasingly uninhabitable.

Nigeria flares more natural gas associated with oil extraction than any other country on the planet, with estimates suggesting that of the 3.5 billion cubic feet (99,000,000 m3) of associated gas (AG) produced annually, 2.5 billion cubic feet (71,000,000 m3), or about 70% is wasted via flaring. This equals about 25% of the UK's total natural gas consumption, and is the equivalent to 40% of the entire African continent's gas consumption in 2001. All statistical data associated with gas flaring is notoriously unreliable, but AG wasted during flaring is estimated to cost Nigeria US $2.5 billion on a yearly basis.

The reason for this practice, which is generally agreed world-wide to be wasteful both economically and environmentally, is that in order to maximize production of crude oil, the associated gas accompanying it is often burned off. Even though companies operating in Nigeria also harvest natural gas for commercial purposes, they prefer to extract natural gas from deposits where it is found in isolation, this isolated gas is known as non-associated gas. This occurs because it is costly to separate commercially viable associated gas from the oil. Therefore the AG found with oil is often burned off in order to increase crude production.

Historically, gas flaring began simultaneously with oil extraction in the 1960s by Shell-BP. Although, the British government subsequently acknowledged that the flaring was unacceptable, it was allowed to continue without any real efforts to change infrastructure and prevent the waste of the gas. This is in contrast to Britain's policies on gas flaring in their own territory, where gas flaring has been reduced to a minimum.

In fact, in western Europe 99% of associated gas is used or re-injected into the ground. Gas flaring is generally discouraged and condemned by the international community, as it contributes greatly to climate change. Which ironically can display its most devastating effects in developing countries like Nigeria, and particularly in the semi-arid Sahel regions of sub-Saharan Africa. The Niger Delta's low-lying plains are also quite vulnerable as they lie only a few meters above sea-level.

Gas flaring in Nigeria is also highly inefficient and releases large amounts methane, which has very high global warming potential. The methane is accompanied by the other major greenhouse gas, carbon dioxide, of which Nigeria was estimated to have emitted more than 34.38million tons in 2002, accounting for about 50% of all industrial emissions in the country and 30% of the total CO2 emissions. As flaring in the west has been minimized, in Nigeria it has grown proportionally with oil production. The volume of associated gas produced and therefore burnt off, is directly linked to the amount of oil produced. So even though the percentage of gas flared from 92% in 1981 has fallen to around 70%, the overall amount of flared gas has increased from 2.1 billion cubic feet (59,000,000 m3) to 2.5 billion cubic feet (71,000,000 m3).

It seems that the international community, the Nigerian government, and the oil corporations are all in agreement that gas flaring has a negative impact and needs to be stopped. However, in reality, efforts at stemming gas flaring have been slow to be implemented. The practice of gas flaring as it has been allowed since oil production began under British, has become set in stone, and would be costly to overhaul to reduce flaring. As a result, little is done by oil companies. This is in spite of the fact that gas flaring in Nigeria has technically been illegal since 1984 under section 3 of the "Associated Gas Reinjection Act". However, none of the regulations stipulated by this document have ever been made public.

OPEC and Shell, the biggest flarer of natural gas in Nigeria, alike claim that only 50% of all associated gas are burnt off via flaring at present. However, this statistic is accepted by few. The World Bank reported in 2004 that, "Nigeria currently flares 75% of the gas it produces." While other sources make similar projections, between 70 and 75% is the generally accepted percentage of gas flared.

Gas flares can have potentially harmful effects on the health and livelihood of the communities in their vicinity, as they release a variety of poisonous chemicals. Just some of combustion by-products include nitrogen dioxides, sulphur dioxide, volatile organic compounds like benzene, toluene, xylene and hydrogen sulfide, as well as carcinogens like benzapyrene and dioxin. Humans exposed to such substances can suffer from a variety of respiratory problems, which have been reported amongst many children in the Delta but have apparently gone uninvestigated. These chemicals can aggravate asthma, cause breathing difficulties and pain, as well as chronic bronchitis. Of particular note is that the chemical benzene, which is known to be emitted from gas flares in undocumented quantities, is well researched as being a causative agent for leukemia and other blood-related diseases. A study done by Climate Justice estimates that exposure to benzene would result in eight new cases of cancer yearly in Bayelsa State alone.

Often gas flares are located close to local communities, and regularly lack adequate fencing or protection for villagers who may risk nearing the tremendous heat of the flare in order to carry out their daily activities. Many of these communities claim that nearby flares cause acid rain which corrodes their homes and other local structures, many of which have metal roofing. However, whether or not the flares contribute to acid rain is debatable, as some independent studies conducted have found that the sulphur dioxide and nitrous oxide content of most flares was insufficient to establish a link between flaring and acid rain. Other studies from U.S. Energy Information Administration (EIA) report that gas flaring is, "major contributor to air pollution and acid rain".

Flares which are often older and inefficient are rarely relocated away from villages, and are known to coat the land and communities in the area with soot and damage adjacent vegetation. Almost no vegetation can grow in the area directly surrounding the flare due to the tremendous heat it produces.

One of the greatest threats facing the people of the Niger River Delta has actually been their own government. The Nigerian government has total control over property rights and they have the authority to seize any property for use by the oil companies. A majority of every dollar that comes out of the ground in the delta goes to the government of Nigeria. As a result of the enormous amounts of sweet light crude that comes out of the delta every day Nigeria has the second largest GDP in Sub-Saharan Africa Despite the wealth flowing into the nation from oil revenues many of Nigeria’s socio-economic factors are worse now than they were 30 years ago According to the World Bank, most of Nigeria’s oil wealth gets siphoned off by 1% of the population . Corruption in the government is rampant, in fact since 1960 it is estimated that 300 to 400 billion dollars has been stolen by corrupt government officials . The corruption is found at the highest levels as well. For example a former inspector general of the national police was accused of stealing 52 million dollars. He was sentenced to six years in prison for a lesser charge .

The situation is very bad and the people have engaged in protests. The problem is many of these protest have been met with unmitigated violence. One example of this occurred in February 2005. There was a protest at Chevrons Escravos oil terminal in which soldiers opened fire on the protestors. One man was killed and 30 others were injured. The soldiers claim that the protestors were armed, a claim the protestors deny . Another, more extreme example happened in 1994. The Nigerian military moved into a region called Ogoniland in force. They razed 30 villages, arrested hundreds of protestors, and killed an estimated 2,000 people .

One of the protestors they arrested was a man named Ken Saro-Wiwa. Ken Saro-Wiwa was a Nigerian TV producer, writer and social activist. In 1990 he founded the Movement for the Survival of the Ogoni People (MOSOP). Ken wrote and spoke out about the rampant corruption in the Nigerian government and he condemned Shell and British Petroleum. He was arrested by the Nigerian Government and imprisoned for 17 months. Then in a show trial Ken and eight others were condemned to death. He and the others were hung in 1995 and he was buried in an unmarked common grave .

The people of the delta states live in extreme poverty even in the face of great material wealth found in the waters by their homes. According to Amnesty International 70% of the six million people in the Niger River Delta live off of less than 1$ US per day .For many people this means finding work in a labor market, which is in many instances hostile to them. Much of the labor in the past has been imported. To a growing degree the labor force for the oil companies is more and more coming from Nigeria. But discrimination is rampant and for the most part locals are discriminated against . This leads to a situation where the men in the community have to search for temporary employment. This has two negative effects on the community. First it takes the men out of the community as they go in search of work. The second is the nature of temporary employment sets up unsustainable spending habits ). They earn some money and spend it thinking it will be easy to earn more, when in many cases this does not turn out to be the case.

As the government officials siphon off all the money generated from oil sales the infrastructure suffers. Most of the villages do not have electricity or even running water ). They do not have good access to schools or medical clinics. For many, even clean drinking water is difficult to come by . The deterioration of the infrastructure in the delta states is so severe it is even a problem in the more urban areas. One example of this is the airport at Port Harcourt. Part of a fence was not properly maintained and an Air France flight hit a herd of cattle on the runway. The airport was closed and is still not open .

The leadership of the Niger Delta region are responsible for most of the underdevelopment in the region. There is large scale corruption amongst the elected leaders especially governors and the leaders have helped sponsor the militants groups kidnapping innocent people and sabotaging efforts by the federal government for any infrastructure development. Indicted corrupt leaders are also cheered by the Niger Delta people .

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Source : Wikipedia