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1.1 Background to the study

 Nigeria  is  not  only  the  most  populous  country  in Africa,  but  the  major  producer  of  oil  in  the  continent. The  political  economy  of  Nigeria  is  based  on  the extractive  industry  (Orogun,  2010).  Major  mineral resources  found  in  Nigeria  include  petroleum,  natural gas  and  solid  minerals.  Oil  from  Nigeria  accounts  for 2.6  per  cent  of  global  production  (BP,  2010:8),  and  the country  is  ranked  the  world’s  eleventh  largest producer  of  crude  oil  (Energy  Information Administration,  2010:2).  As  indicated  in  Figure  1, Nigerian  onshore  and  offshore  oil  reserves  are  found in  the  Niger  Delta  region,  the  Bight  of  Benin,  the Bight  of  Bonny  and  the  Gulf  of  Guinea  (Watts,  2008; UNDP,  2006).  Nigeria  currently  produces  about  2.5 million  barrels  per  day  of  OPEC  production.  The discovery  of  substantial  crude  oil  reserves  in  the  deep and  ultra‐deep  water  was  to  increase  the  reserve  base from  37.2  to  40  billion  barrels  by  the  end  of  2010.  In addition  to  oil  wealth,  an  estimated  5.3  trillion  cubic metres  (TCM)  of  gas,  reserves  make  Nigeria  the world’s  seventh  largest  holder  of  natural  gas  reserve and  the  largest  in  Africa  (USEIA,  2010). Apart  from  oil  and  gas,  Nigeria  is  endowed  with solid  mineral  wealth  that  is  found  across  the  country. Davenport  (2010)  reported  that  the  expansion  of  solid minerals  mining  has  the  potential  to  contribute  15  per cent  to  Nigeria’s  GDP  by  the  year  2015.  Currently,  this *  Correspondence  sector,  unlike  oil,  is  non‐developed,  non‐productive and  currently  contributes  less  than  0.5  per  cent  to Nigeria’s  GDP,  as  against  35  per  cent  from  oil  and  gas in  2009  (National  Bureau  of  Statistics,  2009). However,  Nigeria  is  promoting  the  exploitation  of non‐oil  minerals  for  additional  revenue.  Thus  far, seven  minerals  are  receiving  priority  attention  for privatisation:  gold,  oil  sands  (bitumen),  coal,  iron  ore, barite,  lead/zinc  and  limestone.  

However, pollution from domestic and industry sources, over-exploitation of Oil and  Gas resources and poorly planned and managed communities and coastal  developments  and  near-shore  activities  are  resulting in  a  rapid  degradation  of  vulnerable  land,  coastal  and offshore  habitats  and  shared  living  marine  resources  of  the region  putting  the  economies  and  health  of  the  populace  at risk  [Ayres,2008]. The decline  in  water  and  air  quality  (chronic  and catastrophic) from land and sea-based  activities  especially industrial  i.e.  flaring/power  plants,  agricultural,  urban  and domestic  sewage  run-off,  eutrophication and gas flaring  have been  identified  as  a  major  Trans-boundary  environmental problem  by  communities  in  the  region.  Mainstream economics  of  the  neoclassical  kind  was  not  developed primarily  to  deal  with  environmental  problems  [Daly, 1992].  When facing  a  new  category  of  problems,  it  therefore  also  seems reasonable  to  consider  alternatives  to  the  neoclassical paradigm.  The  limited  reversibility  or  irreversibility  of  many environmental  impacts  is  one  reason  to  question  conventional economic  reasoning,  which  generally  assumes  that everything  can  be  traded  against  everything  else  in  monetary terms. Even  if  it were  accepted  that  impacts  can  be  traded  against  each  other in  one-dimensional,  monetary  terms,  the  price  at  which  such trading  should  occur  is  always  open  to  debate.  The  idea  of correct  prices  for  purposes  of  resource  allocation  suggested by  conventional  cost-benefit  analysis  becomes  less convincing,  if  not  absurd.  Why  those  prices?  What  right  does one  have,  as  an  economist,  to  define  so-called  correct  prices or  correct  rules  for  valuing  environmental  impacts  or  other impacts  in  monetary  (or  other  one-dimensional)  terms?

1.2 Problem Statement

The discovery and extraction of natural resources have brought  different  consequences  to  countries that are endowed with  such  resources.  While  some  of these nations  have become economically strong and self-sustaining,  others  have been  drawn  into  serious  economic  hardships  and  conflicts. Proponents  of  the  resource  have  it  that  the  citizens of these countries  suffer  from  abject  poverty,  environmental  damages, pollutions, diseases, illiteracy and score very low  on  the United Nations Human Development  Index  (UN,2006). Hence there is need to know the socio economic impact of oil production on the people of amukpe community.


1.3 Objectives of the Study

The major objective of the Study is the socioeconomic impact of oil production on the people of amukpe community.


1.4 Research Questions

(1) what does oil production entails?

(2) what are its effect on the environment?

(3) what are its socioeconomic effects on the population?


1.5 Significance of the Study

The research gives a clear insight into the socioeconomic impact of oil production on the people of amukpe community. It will also serve as a preliminary study into the effect of oil production on the environment of the community.


1.6 Scope of the Study

The research focus on the socioeconomic impact of oil production on the people of amukpe community.



BP  (British  Petroleum)  2010,  BP  statistical  review  of  world energy  2010,  British  Petroleum,  London.  

Davenport,  J  2010,  'Nigeria  aiming  to  grow  mining’s  GDP contribution  to  15%  by  2015',  Mining  Weekly,  viewed  on  20 April .

Energy  Information  Administration  2010,  International petroleum  (Oil)  production:  OPEC  countries  crude  oil excluding lease condensate, Administration,  Washington  DC.  Energy  Information .

National  Bureau  of  Statistics  2010,  Revised  2009  and estimates  for  Q1‐  Q3,  2010  Gross  Domestic  Product  for Nigeria,  Abuja,  NBS  Headquarters. 

Orogun,  PS  2010,  'Resource  control,  revenue  allocation  and petroleum  politics  in  Nigeria:  the  Niger  Delta  question', GeoJournal,  vol.75,  p.459‐507. 

R.U.  Ayres.  “Sustainable  economics:  where  do  we  stand? Ecological  economics”. 6, 7:  281-310,  2008.

H.E.  Daly.  “Ecological  Economics  6,  Allocation,  distribution, and  scale:  toward  an  economics  that  is  efficient,  just,  and sustainable”,  pp.  185–194,  1992. H.E.  Daly.  “Beyond  growth-the  economics  of  sustainability.

United  Nations  Development  Programme.  (2006)  “Human Development  Report  of  United  Nations  Development Programmed,  ―Niger  Delta  human  development  report <>  pp. 11,  2006.

USEIA  (United  States  Energy  Information  Administration) 2010,  International  petroleum  (Oil)  production:  OPEC countries  crude  oil  excluding  lease  condensate,  Energy Information  Administration,  Washington DC.

Watts,  M  2008,  Curse  of  the  black  gold.  50  years  of  oil  in  the Niger  Delta,  Powerhouse  Books,  New  York


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Nigeria is not only the most populous country in Africa, but the major producer of oil in the continent. The political economy of Nigeria is based on the extractive industry (Orogun, 2010). Major mineral resources found in Nigeria include petroleum, natural gas and solid minerals. Oil from Nigeria accounts for 2.6 per cent of global production (BP, 2010:8), and the country is ranked the world’s eleventh largest producer of crude oil (Energy Information Administration, 2010:2). As indicated in Figure 1, Nigerian onshore and offshore oil reserves are found in the Niger Delta region, the Bight of Benin, the Bight of Bonny and the Gulf of Guinea (Watts, 2008; UNDP, 2006). Nigeria currently produces about 2.5 million barrels per day of OPEC production. The discovery of substantial crude oil reserves in the deep and ultra‐deep water was to increase the reserve base from 37.2 to 40 billion barrels by the end of 2010... public administartion project topics


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