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OIL EXPLOITATION BY MOBIL PRODUCING NIGERIA UNLIMITED AND SOCIO-ECONOMIC ACTIVITIES OF THE PEOPLE OF AKWA IBOM STATE FROM 2000 TO 2014

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study  

Since the attainment of independence by African countries, the instrument of exploitation has been through direct foreign agents by developed, capitalist countries. And the major foreign agents have been the multinational corporations (MNCs). With particular reference to Nigeria, the availability of large quantities of agricultural products and minerals made the country to be a centre of attraction of these multinational corporations (Ndubuisi and Asia, 2007). Nigerian’s abundant human and natural resources as well as her sophisticated class structure, place her in a good geo-political status viz-a-vis the large nations. These, among other reasons, have made her economy attractive to MNC’s foreign direct investments, especially in the oil sector.

According to Nwilo, and Badejo, (2004) Oil exploration started in Nigeria in 1900s by a German company known as Nigerian Bitumen Corporations. Later, other companies such as Shell Petroleum, Mobil etc came in. The Nigerian Bitumen started drilling oil in 1908 from about fourteen wells around Ijebu-Ode and Okitipupa, off the coast of Lagos. Their activities during this time were not completely successful. Shell-BP was the first oil company to meet with success in the oil exploration business in Nigeria. It was the success story of Shell-BP that kindled the interest of other oil companies, including Mobil, to commence exploration activities in Nigeria.

Hence in 1955, Mobil Producing Nigeria Unlimited (MPN) under the name, Mobil Exploration Nigeria Incorporated (MENI), began operation in Nigeria. In 1961, the company was granted oil prospecting license (OPL) off shores in the present Akwa Ibom and River States. Not long after, the company plunged into full operation and in 1965; shipment of oil began to flow with the completion of a terminal at Bonny Island in the Atlantic coast of the present River State. Then, with the laying of more pipelines to feed the terminals, production increased significantly (Nwilo, and Badejo, 2004).

Following a drop in production during the Nigerian civil war of 1967-1970, output rose dramatically from 2.3% of total government revenue to 80% of national income by 1974(Nwilo, and Badejo, 2005). From the above statement, oil became a central issue in the Nigerian economy which the government quickly realized and moved swiftly to occupy a central stage in the production of the commodity.

This led General Gowon to promulgate in 1969, the Petroleum Act known as Decree No. 51, investing in the State, the total ownership and control of all petroleum products. In 1971, the government established the National Oil Corporation (now known as Nigerian National Petroleum Corporation, NNPC) and joined the oil producing and exporting countries, OPEC. But NNPC had very faint idea of what happens in the oil industry (Nwilo, and Badejo, 2004). The Irikefe Judicial tribunal on crude oil states revealed a wide range of fraudulent practices in the oil industry and collusion between NNPC officials and foreign oil films, eg. Ashland Oil Company, by which Nigeria was, swindled billions of naira yearly. The situation up till date has, however, not changed (Omofomwan, and Odia, 2009).

Since the commencement of oil exploration in Akwa Ibom State by Mobil Producing Nigeria Unlimited, the indigenes of the State have suffered its impact more than they have benefited. Such oil production activities as gas flaring, oil spillage, pollution, indiscriminate construction of canals and waste-dumping have had serious socio-economic effect on the lives of the indigenes of the State, especially in Uquo-Ibeno where the operational base of MPN is situated. This has brought about the existence of un-harmonious relationship between the indigenes of Akwa Ibom State and the management of MPN. Often times, it has resulted to violent protests and demands for compensation by the indigenes of the state against MPN and the federal government (Omofomwan, and Odia, 2009).

Recently, the protesters have adopted a more heinous style in their agitation by destroying oil pipelines, blowing-up flow stations, kidnapping and taking hostage, the foreign expatriates working for MPN. These have given rise to a volatile security situation in Akwa-Ibom State. At present, hostility is still continuing as neither of the key actors in the conflict has shown any sign to give up. Therefore it is against this backdrop that this study investigate the effect of oil exploitation by Mobil on the socio-economic lives of the people of Akwa- Ibom State.

1.2 Statement of the Problem

It has generally been canvassed that the business of oil exploration and exploitation in the Niger Delta has brought the human ecosystem of the region to the point of near collapse (Opukri and Ibaba, 2008). It could also be noted that all stages of oil exploration impact negatively on the ecological environment (aquatic and terrestrial), but the greatest single environmental problem caused by oil exploration is oil spillage.

In a study of the socio-economic impact of oil pollution, Omofonmwan and Odia

(2009) state that crude oil exploitation has had adverse environmental effect on soils, forests and water bodies in host communities in the Niger Delta. Farmers have lost their lands, and are consequently forced to emigrate to other communities in search of livelihood exerting additional pressures on natural resources in such areas. It is noteworthy that, the devastating consequences of oil spill in Niger Delta region with its eventual hazards on both aerial and terrestrial environs tantamount to an irreversible chain effect on both the bio-diversity and safety spills in populated areas affect crops and agriculture through contamination of the ground water and soils. Spills also contribute to the contamination and death of fishes which affects the economy and human health adversely.

According to the Department of Petroleum Resources (DPR) annual Report of 2000, “over 6000 spills had been recorded in the 40 years of oil exploration in Nigeria, with an average of 150 spills per annum. In the period 1976-1996, 647 incidents occurred in the spillage of 2,369,40.04 barrels of crude oil. With only 549,060.38 barrels recovered, 1,820,410.50 barrels of oil were lost to the ecosystem (Worgu, 2000).

In Akwa-Ibom State, oil spills have degraded most agricultural lands and have turned hitherto productive areas into waste lands. With increasing soil infertility due to the destruction of soil micro-organisms and dwindling agricultural productivity, farmers in Uquo-Ibeno, an oil producing community in Akwa-Ibom State, have been forced to abandon their land, to seek for non-existent alternative means of livelihood. Aquatic lives have also been destroyed with the pollution of traditional fishing grounds, exacerbating hunger and poverty in families which depend on fishing as a means of livelihood(Worgu, 2000).

Gabriel, (2007), is of the view that the negative impact which accompanies oil exploration in Akwa-Ibom State (especially oil spillage, gas flaring and pollution), added to the fact that both the government and oil companies in the State have through the years given little attention to solve these problems, has led to frustration and a sense of neglect of the indigenes of the state. The oil companies in Akwa-Ibom State operates under a difficult political and economic environment, especially at the level of communities where their facilities are located.

In Eket for example, Mobil Producing Nigeria Unlimited (MPN) is faced with increasing incident of hostage taking, closures of flow station and other acts which it sees in purely criminal terms. While MPN acknowledges lack of development in the oil producing areas, it sees the problems being faced by the indigenes of the states as government responsibility. Nevertheless, it makes substantial investment in development projects for which it believes, it should receive gratitude rather than censure. Acknowledging the difficult context of oil operation in Akwa-Ibom State does not, however, absolve it from the responsibility of physical degradation of the area where it operates. Oil activities in Akwa-Ibom State have led to disputes with the indigenes over legal obligations to provide compensation for claims of damage, encroachment on community land or waters or for fair share of the oil wealth derived from their land. (Egbe, and Thompson,2010).

Grievances of the indigenes with the oil companies in the State especially MPN, also centres on the appropriation or unremunerated use of  community or family resources, health problems and failure by oil companies to employ sufficient number of Akwa Ibom indigenes in their company (Egbe,  and Thompson,2010).

These problems have subjected the inhabitants of the state to grave economic and social hardship. They have also exposed the inhabitants to environmental hazards which jeopardize their health condition. Added to these, are financial and social crises which have also been created due to protracted morbidity and mortality as well as loss of skilled and experienced labour. The indigenes of Akwa Ibom State have condemned the oil companies operating in their land as instruments of exploitation. On the other hand, the oil companies, believes they have contributed a lot towards the development of the state as well as assisting to protect its ecosystem. Therefore it is against this backdrop that this

study investigate the effect of oil exploitation by Mobil on the socio-economic lives of the people of Akwa  Ibom State. The following research questions guided  this study.

  • To what extent are oil exploitation activities responsible for the low income level, hunger and high rate of poverty among the inhabitants of the state?
  • What measures/policies have governments taken towards solving the diverse problems occasioned by oil exploitation in Akwa Ibom State?
  • What were the impediment against the effectiveness of these measures?
  • How can these measures be improved upon to minimize the negative effects of oil exploitation by MPN on the citizens?

1.3.      Objectives of the Study

The broad objective of this study is to investigate the extent to which indigenes of Akwa Ibom State have benefited or suffered from the exploitation of Mobil Producing Nigeria Unlimited (MPN) in the State. The specific objectives of the study are to:

 

  • examine the extent oil exploitation activities are responsible for the low income level, hunger and high rate of poverty among the inhabitants of the state.
  • Explore the adequacy of the measures/policies government have taken towards solving the diverse problems occasioned by oil exploitation in Akwa Ibom State.
  • Examine the impediments against the effectiveness of these measures.
  • suggest how these measures can be improved upon to minimize the negative effects of oil exploitation by MPN on the citizens.

1.4.      Significance of the Study

The study has both empirical and theoretical significance.

           

Empirically, a study of this nature is significant in  various respects. This work will expose the hidden issues behind the lives of peoples who are poor but are living in the midst of plenty, in an area of the verge of environmental destruction Furthermore; the research is justified on the grounds that its recommendations will enhance policy decisions of government agencies like the Niger Delta Development Commission. It will equally benefit the environmentalist and policy makers on how to regulate the activities of the oil companies in Nigeria and ensure that their corporate social responsibility is implemented

Theoretically, academia will find the study an educative and resource material. Future researchers on oil exploitation in Nigeria will find the study a rich resource material for their research. The study is a further input to the increasing volume of available literature on the issue under study. A study of this nature is a training ground for the conduct of cutting edge research in the field of Public Administration and Local Government Studies.

1.5.      Scope and Limitations of the Study

The scope of this study is limited to oil exploitation by Mobil on the socio-economic activities of the people in Akwa Ibom State between 2000  to 2014. This time-lime was chosen because it embodies the period when the people of Akwa Ibom  mostly lost their lands, and  were consequently forced to emigrate to other communities in search of livelihood exerting additional pressures on natural resources in such areas.

Limitations of the Study

In research endeavours of this nature it is often fraught with impediments in the process, which are likely to limit the extent of reliability of its findings. The difficulty in obtaining official documents from Mobil should be noted. As a result of the unfavourable terrain, it was not possible for consistent visitation to the communities in the study area.

 

It was also discovered that there was general unwillingness and apathy with which the people of the area viewed an academic work of this nature. Some people were hesitant to freely give out information for this type of research. However, the enormous body of literature in the internet, published and unpublished materials including some official publications helped the researcher overcome the likely negative effects of these constraints.

 

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