Oil Exploration in Colonial Nigeria, c. 1903-58

Abstract

This article explores the history of oil exploration in colonial Nigerian between c.1903 and 1958 when the first shipment of Nigerian crude oil arrived in Rotterdam. It debunks the two most persistent myths in Nigerian oil historiography namely that oil exploration dates back to 1908 when the German oil company, the Nigeria Bitumen Corporation started operations. An examination of contemporary sources show that oil exploration activities date back to at least 1903, and that Nigeria Bitumen was indeed a British oil company with a listing on the West African Market of the stock exchange in London. The paper argues that the challenging Nigerian environment, which required sophisticated technology, and the limited support from the British government ensured the failure of early oil exploration activities by small British oil concerns. Consequently, over time, the exploration of the oil possibilities of colonial Nigeria became the domain of large, integrated oil companies, in particular Royal Dutch/Shell and British Petroleum, who had the financial resources to fun the expensive search for oil in the colony, and the technological expertise and equipment to achieve success over the long term. This dominance by the majors remained a characteristic of the Nigerian oil industry well into the 1990s. The colonial roots of two additional characteristics of the modern oil industry in Nigeria are further traced, namely the enclave nature of the industry within the broader Nigerian economy, and the establishment of oil as a national concern, which concern in general overruled the oil-related problems and concerns of local oil producing communities until the emergence of oil-related minority struggles in the 1990s.