NIGERIA - Exploration History.

It was in 1908 that a German company, Nigerian Bitumen Corp., began exploring for oil in Nigeria. It operated in the Araromi area, of the present Ondo State, 200 km east of Lagos. The company abandoned its dry, shallow wells there at the start of World War I in 1914. In 1936, Shell D'Arcy was granted sole rights to explore for hydrocarbons all over Nigeria and prospecting began in 1937. Shell's activities were interrupted by World War II.

Less than two years after World War II ended, Shell in 1947 teamed up with British Petroleum to form a Shell-BP unit in Nigeria. The group discovered oil in 1956 at Oloibiri in the Niger Delta, and production began in 1958 at the rate of 5,100 b/d which was mostly exported. The group realised later that pay zones lay below 1,500 metres. As Nigeria gained independence in 1960, a new government in Lagos limited the group's concession area and invited other companies to explore for oil. They were offered both onshore and offshore blocks.

By 1961, Mobil, Agip, Gulf Oil (now Chevron), Safrap (now Elf), Amoseas (now Texaco/Chevron), Tenneco and others had begun exploration activities both onshore and offshore. Most of them were later to be more successful in offshore areas, while the Shell group had the best onshore fields. The pace of oil discoveries picked up in the subsequent years. Eventually, however, BP left Nigeria and Shell teamed up with other companies (see profiles in Part 2). BP returned to Nigeria 15 years later, in 1993, and signed with Statoil for PSAs to explore deep-water prospects (see above).

A former colony, then a British protectorate from 1914, Nigeria gained its independence from Britain on Oct. 1, 1960. But the Eastern Region seceded on May 30, 1967, leading to a civil war. The self-proclaimed Republic of Biafra was crushed in early 1970. In 1971, as oil became more important to the economy, the state established the Nigerian National Oil Corp. (NNOC) and joined OPEC as the 11th member. It acquired 33 1/3% in Nigerian Agip and 35% in Elf. NNOC ran as an upstream and downstream company and the petroleum ministry had a regulatory function. On April 1, 1977, a merger between NNOC and the ministry created Nigerian National Petroleum Corp. (NNPC). This was to combine the ministry's regulatory role and NNOC's commercial functions: exploration, production, transportation, processing, oil refining and marketing.

The regulatory role was later to be assumed by the Petroleum Inspectorate, a unit of NNPC. But decision makers at NNPC have changed frequently as there have been seven military coups from 1960 to Gen. Abacha's takeover in November 1993, with the only civilian regimes being the Second Republic in 1979-83 and the current one since May 29, 1999. In particular after 1972, every new military ruler wanted to control the oil sector and NNPC's management was affected in one way or another.

Through the years, NNPC has been active in seismic exploration onshore and offshore. Its seismic crew, known as Party X, has made several discoveries such as a field in block OPL-110 in the Niger Delta, the Oredo field, etc. It also carried out work on contract for Phillips Petroleum and other E&P companies in the Chad, Anambra and Benue Basins. But NNPC has depended on the technological capabilities of the major operators, like Shell, Mobil, Gulf (Chevron) and others, which produced the bulk of Nigerian oil and did most of the exploration work.