The Politics of Oil Extraction in
Nigeria
Omolade Adunbi, PhD
Assistant Professor
The University of Michigan
Ann Arbor
oadunbi@umich.edu
Introduction
• Nigeria gained independence from Britain on October 1st 1960.
• Before independence, Nigeria operated an agrarian economy based
on cash crop products such as cocoa, peanuts, and palm oil.
• Oil was discovered in commercial quantities at Oloibiri in the Niger
Delta in 1956 with commercial exploitation starting in 1958 with
5100 bpd.
• There are 606 oil fields in the Niger Delta with 355 onshore and 251
offshore.
• Daily production is at 2.5 million bpd with 45% of this coming to the
United States.
• Today, oil contributes over 90% to total revenue earnings of the
government.
Key Actors in the Oil Industry
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ExxonMobil Producing,
Shell Petroleum Development Company,
ChevronTexaco
Agip
ConocoPhillips,
Ashland,
Pan-Ocean
TotalFinaElf
China National Offshore Oil Corporation ( a new player)
India Oil Company Ltd ( a new player)
StatOil
Structure of Oil Governance
• Oil economy governed through a joint venture between the
Nigerian state and the oil corporations. For example:
• The joint venture operated by Shell, accounts for more than 40% of
Nigeria’s oil production at 899,000 bpd, with Nigeria National
Petroleum Corporation owning 55%, Shell 30%, and TotalFinaElf
10%, and operates largely onshore.
• ExxonMobil, operating mainly offshore in the shallow waters of
Akwa Ibom (Qua Iboe), produces over 632,000 bpd, with NNPC’s
stake at 60% and ExxonMobil’s at 40%.
• The venture managed by Chevron, largely offshore in Escravos,
produces approximately 400,000 bpd, with NNPC owning 60% and
Chevron 40%.
• Nigerian Agip Oil produces 150,000 bpd, mostly from onshore fields
with NNPC’s acquisition at 60%, Agip’s 20%, and ConocoPhillips
Petroleum’s at 20%.
Why Is oil important to Nation-States?
• Oil extraction could help create a nation-state
with two bodies: Political body (citizens) and
natural body (the subsoil).
• project a nation-state into the international
capitalist system where natural resource money
confirms for the state and the elite a nation on
the path of ‘modernization’.
• Transforms the state to a national landlord that
rents out territories to corporations.
• Centralizes the state and turns the state into an
authoritarian enclave
Why Oil (Contd)
• Oil transformed to be the only official state business and the politics of its
management will become the business of politics
• Distribution of rents create local market of elite consumers of mostly
imported products. This would include importation of instruments of
coercion.
• Oil does not only produce wealth for the nation but also has the capacity
to produce a particular culture that redefines citizenship (e.g.
blackness/Africanness, sites for cultural production, FESTAC and Annual
Abuja carnival)
• Oil policy will be made synonymous with nationalistic economic policy
that seeks to defend the nation’s subsoil.
• The functions of the state become administrative and calculating organ
that works for transnational capital.
• Provision of social services and basic needs of citizens take the back seat.
State’s allegiance to transnational capital remains sacrosanct while
remaining unresponsive to increase in social inequalities.
What oil represents for Corporations
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Corporations get operating licenses from the state to exploit oil resources.
Corporations imagine a world driven by capital through a supposed lens of
‘modernization’.
A form of modernization that is inscribed in neo-liberal reforms that transfer the
wealth of an enclave into another.
Corporations’ activities produce an effect that alienates societies/communities
where oil resources are located.
Corporations tend to depoliticize oil extraction. Thus, divorcing the environment
from politics becomes a way of disavowing responsibility from social effects of
resource extraction.
Corporations seek to reconfigure the ‘material, political and symbolic’ meanings of
territory, nationhood and sovereignty. The state becomes a site where nature is
made into a commodity that benefits corporations and the state but pauperizes
the people who live where the commodities are located.
Profit sharing arrangements with the state position corporations as the business
wing of the state.
What Oil Means to Environmental
Groups
• Environmental Groups engage in spectacular accumulation through:
• Images of panoramic landscapes where exotic people and animals are
used to communicate urgent problems in desperate need of the timely
solutions that these organizations claim to uniquely qualified to offer
• Present an audience of supporters with compelling virtual opportunities
(problems) to be solved
• Resources needed to solve the problem through a process of gift-given as
a necessary instrument.
• Symbolically connecting the past with the present in ways that create
historical continuity. For example, presenting the environment as an Eden
in the past that has been transformed to hell in the present by
corporations.
• Challenging the legitimacy of the nation-state over ownership of natural
resources. For example, reiterating processes of communal ownership
over state instituted legal regimes.
What Oil Means to Communities
• Denial of Access to communal land
• Some citizens of oil producing communities
would be transformed into surveillance
contractors for foreign oil firms.
• Oil fields, flow stations, and pipelines become
sites of conflict between and among communities
• Community members become object for political
manipulation, suffering economic deprivation
with capacity to produce alternate
governance/self-governing individuals and
communities.