2.1       Historical Survey of Oil Exploration and Extraction in Nigeria Since  1956
The history of appreciable exploration and exploitation of oil and gas in Nigeria started with a German company as far back as 19th century[1] Within that period, exploration of oil in commercial quantity was rarely mentioned in the Nigerian history of oil and gas production and exportation.

            Consequently, there was no much emphasis on what should be paid by this multinational oil companies as royalties. Perhaps, the companies sometimes had little or nothing to go home with after several unsuccessful prospecting, exportation and drilling. It was on the mercy of this situation that the people then mostly accept anything that was of customarily importance to them as loyalties.
            It was on the aforesaid situation that A.K. Mgbolu, in one of his books,55 declared as follows,
Exploration of oil and gas in any commercial quantity was hardly known to the ancient communities of the different nationalities that make up Nigeria, such complex issues as oil exploration, drilling, refining and transportation on the high seas and the sales in the intercontinental markets were well beyond the knowledge of the people. No wonder, they only accept walking sticks, rum and kola nut as royalties in the early years of exploration in Nigeria, since custom is just a mirrow of accepted usage of a particular community or society in question.[2]

On Sunday 15th January, 1956, Oloibiri oilfield was discovered.[3] The discovery of oil and gas in Commercial quantity by shell BP on the said date in Oloiberi in the present day Bayelsa State, ended the 50 years of unsuccessful oil exploration in the Niger Delta area of Nigeria.
            Early, in August 1955, the Shell Darcy had drilled the discovered oil well vertically to a total dept of 12008 ft, (3660m).[4] The well was tested and it flowed at
the rate of about 5000 barrels (790m3) of oil per day and was deemed to be of commercial discovery. Following the discovery, shell stepped up exploration in the Niger Delta. And by 1958, Shell Diarcy had discovered oil in twelve areas in the Niger Delta some of which are; Oloibini, Afam, and Bonny where the most promising fields were discovered.[5]
            Significantly too, Nigeria exported its first crude oil in February, 1958 from the Oloibiri oilfield, this was done through oil pipeline layed by Royal Dutch Shell from the port Harcourt on Bonny River to access export facilities. The oil exported has the initial measurement of about 5,100 barrels.[6]
            However, the Oloibiri oil field produced the totality of (3,200,000m3) of oil during its 20years life circle. And finally stop production in 1978 and the field was abandoned. Moreso, another section of the field was drilled so as to increase production”.
            Consequent upon the development above, the inordinate duration of 30 to 40 years of mining lease initially granted before 1959, was trimmed down to 20 years with right of renewal upon application to the minister of petroleum”. The manner or procedure with which the multinational oil companies are to be levied was also provided10 as follows;
There shall be levied upon the profits of each accounting period of any company engage in petroleum operations during that period, a tax to be charged, assessed and payable in accordance with the provisions of this Act.

And formula for charging and determining what constitute penalties was also prescribed under S. 33 of the petroleum Act”.[7]
Upon joining OPEC,[8] Resolution XVI of 1968, which mandates the state parties to participate activity in the production of oil in their country immediately, Nigerian government, required 30% participatory interest. This was increased to 33% in 1972 and 35% in 1975 by 1976, the interest was increased to 55 and 60% in 1979 and the increase continued at this rate to the year, 2000.[9]
Consequently, following the report of the crude oil sale Tribunal 1980, the Federal Government modifies the sale of production share contract. The current P.S.C. provides for Tax oil in negotiated quantity to be allocated to the NNPC, on behalf of its self and the contractor.[10] Also, the production sharing contract of 1999, provides for the allocation of crude oil proceeds in the priority order of Royalty oil, cost, tax oil, and profit oil. The principal terms as used in the provisions governing the production sharing contracts P.S.C and in the deep offshore and inland basin.
            Apart from shell, other multinational oil companies operating for oil in Nigeria for oil exploration include; ESSO oil, EIF, Ashland oil, Shevron, Mobil and State oil.
            By the end of 1998, the deep water operates in Nigeria had achieved the following success;
1.         Acquisition of 21,000 km seismic lines.
2.         Acquisition of 21,500 km seismic lines.
3.         Drillings of 33 exploration/appraisal wells in depths ranging from 300-14060 m. Better still significant discovery reported by most of the operators. [11]Little wonder then, that against a commitment of 864 million US Dollars, for the first deep water prospecting under the production sharing contract (PSC). The industry has invested approximately 1.3 US dollars up to the end of 1998.[12]
The history of Nigerian crude oil has been a glorious story. In 2000, alone, Nigerian gas production in the year was approximately 1,681.66 billion scf. NNPC upstream operations in joint partnership with the major multinational companies which are operating predominantly in the on-shore Niger Delta coastal with offshore areas and lately in deep waters produce.[13] There had been a continued breakthrough in the annals of oil exploration in Nigeria. In August 2012, there was a report of discovery of crude oil by governor Aliyu Wamakko of Sokoto State.[14] Infact, if a research is to be carried out to reveal the amount of oil deposit in all parts of Nigeria, I reasonably believe that the result will certainly show some traces of oil deposit in virtually all the 36 states that make up the country. 

2.2       The Impact of Oil and Industrial Pollution on the World Environment and Nigerian Environment in Particular

            The ravaging effect of oil and industrial pollution on the world environment cannot be over emphasized. Too many losses usually make the records wherever large amount of oil is discharged into the marine environment. This occurs most of the times as a result of illegal discharges of oil, tanker accidents, and explosion during exploration, pipeline leakage, and operational discharge from tankers.[15]
            The pollution of the marine environment with chemical contaminant such as oil has become one of the most critical environmental problems over the centuries. The reason been that whenever a particular sea area is polluted at a particular point, the pollution along side its resultant damage continue to ravage the sea across many countries of the world. The effect is that the sea becomes on conducive for aquatic lives, unfit for aquatic activities and loss of marine resources. (More on water pollution will be discus under 3.3 of this chapter).
            Similarly, pollution emanating from industries constitutes various forms of air pollution ranging from different characters of offensive odor diverse colorations, noise, smoke, mist, soot, dust and smog.[16]            Nigeria particularly had witnessed series of environmental degradation resulting from oil pollution. Notably, the  most oil pollution prone areas in Nigeria are the Niger Delta region and the people from these areas have suffered from the consequences of pollution (detailed study on the people of Niger Delta and environment fouling is made under 3.5 of this chapter).
            Generally, the impact of these pollutions on the environment could stem into the following deplorable situations;

i.          Water contamination: The discharge of waste waters from industries into the sea or surface waters, oil spill from pipeline or tankers, and other chemical contaminants. Sometimes pollute the waters and make it unfit for its use.
            The various laws controlling and regulating oil pollution in Nigeria (as discussed under chapter two of this work) frowned at this act. Also, our courts in various occasions have held the offenders of these pollutions strictly liable for the offence as witnessed in the case of Ryland v. Flectcher.[17] This position was upheld in the case of Umudje v. Shell BP Dev. Co (Nig) Ltd,21 where the defendant company was held liable for polluting the plaintiff’s fish pond and his land leading to the death of fishes. In fact, there are several other cases where the accused companies were held liable to pay compensation to the complainant. For example, the recent cases of Niger Delta Farmers v. Shell BP oil Co. [18]Where the Dutch Court in 2013 finds Shell guilty of oil pollution in Nigeria.
            Finally, where the water is contaminated with oil, the result is usually hazardous and environmentally threatening with devastating effects on the ecosystem and tourism.

ii.                 Formation of Acid Rain: The activities of petroleum industries in such areas as Warri, pot Harcourt and Kaduna can pose a severe threat on the nature sometimes. It is noted that several billions cubic meters of natural gas were flared at different sports in these oil refineries’ areas yearly.[19]Dust particles, oxides of nitrogen, carbon monoxide, carbon dioxide, oxide of sulfur are emitted into the air. When the gases emitted from the flares mixed with the vapour in the atmosphere, it may cause background atmospheric reaction, resulting in the formation of acid rain.

     iii.    Global warning: The gas emitted from the industrial plants and automobile engine,      sometimes retard the movement of the useful energy radiated back from the earth, from getting into the space in the process often referred to as greenhouse effects. Such gases as methane, nitrous oxide, carbon dioxide and water vapour, insulate earth surface and protect it from the concentration of sum raze (excess warm temperature).
However, the rise in the concentration of these gases, trap more heat within the atmosphere, causing rise in temperature. Other wise known as global warning.

2.3       The Concept of Oil Pollution Damage
            Oil pollution, as defined under the introductory part of this work, is associated with the exploration activities mainly by the oil industries. The meaning of pollution itself as was also explained under chapter one, to include inter alia, direct or indirect introduction of substances into the environment by man, having deleterious effect on human health, animals, plants and other aquatic lives.
            On the other hand, environmental damage has been described to consist of pollution in all ramifications, spillage, domestic refuse carefully thrown about residential neighborhoods, inversion of industrial fumes and effluents into the atmosphere, construction of structure without appropriate authorization and compliance with health and town planning regulation.[20]
            Oil pollution damage according to international convention on oil pollution preparedness, responses and co-operation,28  menace loss or damage caused outside the ship carrying oil by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge may occur, and includes the costs of preventive measures and further loss or damage caused by forty equipments
            The concept of oil pollution damage could further be discussed in the following headings;

i.          Land pollution: Oil spillage causes a very high degree of land degradation. The land here is basically includes the soil, the vegetation and the ecosystem. Water and air pollution will be treated separately.
            Some communities in Nigeria, has suffered loss as a result of the discharge of oil on the land which rained sere havoc on some of these animals and renders the soil unfit for production of crops.
            Basically, discharge of oil or escape of oil from the defendants place or equipment is a strict liability offence as witnessed in the case of Umudje v. Shell BP Nig Ltd.[21] This position was followed in the recent case of National Oil spill detection v. PPMC,[22] Where the Federal High Court sitting in Asaba delta State, imposed the sum of N62.5m fine on the pipeline and product marketing company for refusal to cleanup and remediate some oil spills caused by the company in Kaduna and its environs and other parts of the country.
            However, it is a substantial defense to prove that the damage was caused by the independent act of the third party as posited by the court in the case of machine Umudije & ors v. SPDC (Nig) Ltd supra
            Secondly, where the plaintiff gave or consented to the act, he cannot in turn bring an action to enforce the wrong. The principle of “volenti non  fit injuria,” will catch up with him.
            Thirdly, it is also a defense to prove act of God.

ii.   Air pollution: Air pollution occur as a result of release of chemical particles and inordinate sound vibration into the atmosphere. Some of these gases includes but not limited to the following: sulphur dioxide, chlorophlorocarbons, (CFCS), carbon monoxide and nitrogen.
            In cities where there is a high concentration of industries and automobiles, the gases emitted into the atmosphere is combined with waste vapour in the air to form acid which in turn return to the ground  as acid rain as explained before. And it can be noted that air pollution mainly from cars and industries, places hundreds of tons of hydrocarbons to the ocean each year.[23] These particles which settled at the atmosphere are washed down by rain back into the ocean, resulting to the death of aquatic lives.
            Furthermore, air pollution culminates to global warning any noise pollution. It is important to re-emphasis as noted before that the green house gases in the atmosphere. On the other hand, noise pollution comes as a result of release of dangerous sound vibration into the atmosphere. Mining industries and aircraft sometimes causes this type of pollution. However, section 247 of the Criminal Act,[24] provides as follows:
Any person who vitiates the atmosphere in any place so as to make it noxious to the health of persons in general dwelling or carrying on business in the neighborhood, or passing along a public way; or does any act which is, and which he knows or has reason to believe to be, likely to spread the infection of any disease dangerous to life, whether human or animal; is guilty of a misdemeanor, and is liable to imprisonment for six month.

            In Nigeria, the problem is not always the relevant law but the courage of the responsible official to enforce the laws. As an average Nigerian I witness and it is an obvious fact that these wrongs that the law aimed at protecting has like a norm stayed with us and it seems no one cares.

iii.       Water pollution: Water pollution like every other kinds of pollution is the contamination of chemical substances with the waters (be it stream, river or ocean or even ponds), resulting to fouling of such water.
            Usually, when petroleum product is discharged into the water, it is spread in a tin sheet manner and continues to float on the water surface thereby blocking all the available air space into the water. The resultant effect of such an incident is mass death of aquatic lives and loss of marine resources in the water where the pollution occurs.
            However, apart from instances where the damage resulting to the spill or discharge of oil into the water is caused by the natural occurrences such as rainfall, wind storm or any other act of God and or the act of a third party,[25] the various provisions of the laws regulating oil pollution, provides for compensation for damage arisen from oil pollution. These laws have been treated under chapter two of this work. The positions of these laws have been upheld by the courts in so many cases emanating from oil pollution. For example, Wisky J. in line with the provision of the oil pipeline Act[26] ruled in the case of Ikpede v. S.P.D.C. (Nig) Ltd,[27]  that all companies who have been granted license to prospect for oil in the country under the petroleum Decree (no 51) of 1969 can lay under the oil pipeline in lieu of compensation for any damage caused by leakage from oil pipeline.
            Also, in the case of S.P.D.C (Nig) v. Tiebovii[28]6 millions naira was awarded to the plaintiff as compensation for the damage done to his swamp and for the death of his of fishes. The position was also the same in the case of Niger Delta farmers v. S.P.D.C (Nig) Ltd.[29]

2.4       Oil Spillage Cum Gas Flaring
            A. Oil spillage:
            Oil spillage in Onyori and Ors v. SPDC (Nig) Ltd and Ors[30] was defined as non-continuous discharge into the environment which normally occur as a result of accident caused by multinational companies’ equipments or through human error.
            However, oil spillage of varying magnitude can occur at any stage in oil industry operations. For instance, the world witnessed a large oil spill in 1967 at the coast of England and Santa Barbara caused by the grounding of the ‘Terrey Canyon” tanker off the coast of England.[31] And that of California two year later is larger than life demonstration.[32] However, less dramatic spills occur routinely every year by the more vulnerable and forty tankers.
            The laws regulating the offences of oil spillage in the country has been discussed under chapter two of this work. Consequently, Nigerian courts in consonance with the provisions of these law, now parade a long list of decided cases on oil spillage. Notable among these cases are, chief Otoko v. SPDC (Nig) Ltd.[33] where the supreme court held  that the defendant oil company  was liable for the spillage  which caused the distribution of the property of the plaintiff. Similar decision was also reached in the Umudje v. Shell BP (Nig) Ltd.[34] where Shell BP was held liable for oil spill.
            However, Section 4(1) of the Decree[35] provides defense for an offence of oil spillage to includes; discharge of oil for the purpose of saving lives, vessel or cargo and accidental discharge done to leakage.
            Causes of crude oil spillage include: equipment failure, sabotage, human error, corrosion, blowouts, engineering errors, natural causes, act of third party and accident.

B         Gas Flaring:
            Gas flaring in a large scale is an extremely wasteful and environmentally harmful practice, which is now universally discouraged as it is a major contributor of greenhouse effect.[36] The issue of gas flaring has a nexus with economic, environmental and health perspectives. Gas flaring constitutes an excessive waste of the nation’s gas resources and can as well be resourceful if well managed. Acid rain in the Niger Delta area has been linked with gas flaring although, this has not been proven by results and assessments based on environmental impact studies conducted in the region.[37] 
corrosion of galvanized steel roofs is one of the most frequent complained effect of gas flaring in Nigeria, mainly because most houses are been covered with this sheet in the country. The expected amount of N-oxides and SO2 being emitted from gas flaring are estimated to be approximately 210,000 and 40,000 tons/year, respectively in River and Delta States (SIC).[38] 
             The government of Nigeria recognized the potentiality of the natural gas industry and promulgated legislation banning gas flaring.[39] Under the Associated Gas re-injection Act,[40] all companies were to submit gas utilization preliminary programmes by 1st April 1980, and detailed programmes on utilization or re-injection by January 1980. And so company is permitted to flare gas without the to flare gas without the permission of the minister.[41] Laws for the ceasure of gas flaring in Nigeria, has been discussed in great detail in chapter two of this work.

2.5       The People of Niger Delta and Environmental Fouling
            Located in the swampy region of Nigeria, the Niger Delta people existed in an area harboring the major natural crude oil deposit which “like a blessing has placed Nigeria in a viable position in the world economy”.
            Oil has as in other oil producing countries of the world, transformed the political structure of Nigeria and enhanced a massive expansion in the bureaucracies of the federal Government (Olorode1998; Jemoh and Aghalino, 2000). While the exploitation of oil has no doubt, enhanced socio-economic transformation in many oil prospecting and oil producing states. The accompanying fallout remains tragic and disturbing in several states and oil communities of Nigeria.[42]
            In Nigeria, oil pollution particularly oil spills have destroyed the sources of livelihoods of the people of the Nigeria especially of the Niger Delta area which is basically fishing and farming.[43]
            The underdevelopment in the river-rine communities of Niger Delta, partly due to their relative inaccessibility and the higher costs of development projects (for natural reasons such as the type of soil, higher technology and distance). And partly due to government partial attention to the area in terms of development, couple with the activities of the multinational oil companies (example Shell BP) operating in the area which destroyed their farms and fish pond, triggered of serious disturbances in the area.
            In the 1990s, tensions arose between the native of Ogoni people of the Niger Delta and the Shell BP. The concerns of the people was that very little of all the money earned from oil on their land was getting to them in spite of the damages  caused on them and their land through oil pollution particularly from the shell’s operational activities.[44] in 1993, the movement for the survival of Ogoni people (M.O.S.O.P) organized large protests against shell and the government. After occupying the refineries, shell withdrew their operations from the area.
            Consequently, Nigerian government raided their villages and arrested some of the protesters, ken Saro Wiwa being the most prominent was later executed against widespread international oppositions from the Commonwealth of Nations and human rights organization.[45] In order to alleviate the sufferings of the people of the Niger Delta area, the Nigerian government has through various legislations made oil pollution a compensatory offence.
            Similarly, payment of compensation for all the damage incurred in the cause of oil operation, has become one of the condition precedence for renewal of an oil mining lease. This was the opinion of the court, in the case of Seismograph Services Nig. Ltd v. Esis Akororo[46] (more details on compensation is provided under Chapter Four of this work). Furthermore, among the series of step taken by the Nigerian government and the multination oil companies to combat environmental fouling in Niger Delta includes the formation of clean Nigeria Association C.N.A) in 1981. With the primary purpose of maintaining the capability to control spills of liquid hydrocarbons or pollutants in general where exploration is carried out in Nigeria.[47]

[1] Yinka Omoregbe Oil and Gas Law in Nigeria  (Malthouse press Ltd, 2001) P.10
[2] A.K. Mgbolu Petroleum Act with Some Basic Concepts in Oil and Gas Law in Nigeria (willyrose & Appeased   
   Publishing Company 2011)   p5
[3] Lewis v. Bankole (1909) NWLR (Pt. 812) 107 .  Oloibiri Oil Field Exploration History Appraisal, Development 
   and Production available at 
    http/./ assessed on 21/06/13
[4] Supra
[5] Page22 Op. Cit
[6] Page22 Op. Cit
[7]  Petroleum Profit Tax Act. Cap 334 LFN 2010
[8] Page23 Op.Cit
[9] Organization of Petroleum Exporting Countries (OPEC) 1960.
[10] A..K. Mgbolu Faculty of law Ebonyi State University, Abakaliki Lecture Note 2013
[11] Nigerian  National Petroleum Corporation (NNPC)  Exploration. Available at http././   Exploration.abpx.searched on 20th June 2013
[12] ibid P32
[13] Madele. G. A Commercial and Industrial Law Journal 2 (2012)
 (Comparative Study of the  Legal Control of Oil Pollution in Nigeria and under International  
    Law)  page. 130   assessed on 20/06/2013.
[14] Madele GA. “Cooperative Study of the  Legal Control of Oil Pollution in Nigeria and under International  
    Law” (2012) Vo1.1 no.2, Commercial and Industrial Law Journal 129, P130.
[15] Margaret T. Okorodudu, Laws of Environmental Protection ( Calop Publication Nig.Ltd Ibadan,1998) page. 391.
[16] 2018661] L.R.I.Exch.265
[17] [1975], 11 se (Pt. 155) at P 693.
[18] Supra Margaret T. Okorodudu Op. Cit,  P392
[19] Supra P2
[20]    O.B. Ekop  (eds) Environmental Pollution and Management ( the Tropics Publishers, Enugu,1990)vol.1 Ps. 377-398.
[21] Supra P19
[23] Op. Cit.
[24] Cap. C. 38 L.F.N. 2010
[25] Alubui & Ors v. Shell BP P.D.C (Nig) Ltd.
[26] Cap. 145, 2010
[27]  [1973] M.W.S.J. 61 at Ps88-89
[28] Supra. (35) [1982] Unreported Suit no. FCA/B/1/8 of 7th  Dec. 1982.
[29]  Supra P2
[30] [1982] ibid P29
[31] T.A. Omatola , “ Environmental Laws in Nigeria Including Compensation” (Faculty of Law University of Lagos 1990) P235 and 234.
[32] [1990]6 NWLR (Pt. 159) Aat p. 693
[33] [1990]6 NWLR (Pt. 159) p. 693
[34] Oil in Navigable Waters Decree 2010 ibid
[35] ibid P9
[36] Yinka Omoregbe,. “Oil and Gas Law in Nigeria”,(Malthouse Press Ltd Ikeja Lagos, Nigeria, 2001), P58
[37] Op.  Cit P36
[38] Magerate T. Okorodudu, “Laws of Environmental Protection” (Caltop Publication Nig Ltd,Ibadan, 1998)P401.
[39] Associated has Re-injection Act Cap. A25 L.F.N, 2010.
[40] S. 3 of the Act ibid. P50
[41] ibid P9
[42] Steve Metiboba, “Socio-cultural issues in oil  exploration in Nigeria” Available at htt/./ s/Dr. Ebonyi State University Law Journals, Vol. 4. 2011. p. 232
[43] Oladele G.A; Corporate Social Responsibility in Nigeria; the Emergenotadele G.A; Corporate Social Responsibility in Nigeria; the Emergence Regulation, Ebonyi State University Law Journal , vol. 4. 2011. 232.
[44] visited on 23/06/2013.
[45] ibid.
[46] [1974]6 NWLR
Share on Google Plus


The publications and/or documents on this website are provided for general information purposes only. Your use of any of these sample documents is subjected to your own decision NB: Join our Social Media Network on Google Plus | Facebook | Twitter | Linkedin