In the late 1950s, the British discovered oil in Nigeria. Since then, oil production has become Nigeria’s largest industry and the main contributor to the country’s gross domestic product. However, Nigeria’s oil industry has been plagued by political and economic instability. Corrupt military regimes and environmental damage have had a negative impact on Nigeria in general.

Nigeria’s oil reserves are estimated at approximately 19.5 billion barrels. Some sources believe there is even more oil in reserve. In 2001, Nigeria’s oil production was around 2 million barrels per day. Nigeria has about 159 oil fields in operation.

Offshore oil extraction has also started to increase and there is still a lot of growth potential in this sector. Offshore oil drilling has some advantages over onshore drilling, such as fewer restrictions, fewer incursions by local militants, and fewer chances for sabotage.

Oil exploration and production is almost entirely a joint venture between foreign oil companies and the Nigerian government. Local independent companies account for only a very small amount of oil production. These are some of the foreign oil companies operating in Nigeria: Agip, Chevron, Exxon-Mobil, Royal Dutch Shell and Total.

Nigeria also has natural gas reserves. Unfortunately, most of the natural gas that is discovered during crude oil extraction is flared. This can cost Nigeria millions of dollars every day in lost revenue.

Most of the country’s oil reserves are located in the area known as the Niger Delta. This is the area around the Niger River where it forms a delta before entering the Gulf of Guinea. There are also offshore oil reserves that are slowly being extracted by oil rigs.

You can be forgiven for thinking that the wealth generated by oil exports is shared by the general population of Nigeria. Unfortunately, this is not the case. In fact, the opposite is true. Due to widespread corruption in government, vast oil wealth is shared only among the richest 1% of the Nigerian population. The other 99% of the population have not shared in the wealth created by Nigeria’s oil revenues. Protests by the general population over the poor social and economic state are often met with excessive use of force by the Nigerian government and military.

Numerous oil spills have already caused environmental damage in the Niger Delta. This includes the contamination of water supplies and the destruction of tropical forests and mangroves. Oil spills can occur due to pipeline corrosion, insufficient inspection and repair routines, or sabotage.

Nigerian oil is still being extracted despite unresolved environmental and human rights abuse issues associated with it.