Assessment Of Oil Spillage And It’s Control In The Oil And Gas Industry In Nigeria

Project and Seminar Material for Mechanical Engineering ME

Assessment Of Oil Spillage And It’s Control In The Oil And Gas Industry In Nigeria


This project set out to examine the compensation of oil spill victims in the Nigerian oil industry. The compensation of these victims has become clumsy and dark in the wake of oil bunkering, pipeline vandalism, sabotage, since in the past, oil spill was as a result of the activities of the oil companies or operators. The object is to discuss who is responsible for payments of compensation to oil spill victims who are entangled in a political system that lacks legislative and administrative guidelines and framework that will effectively deal with the issue of petroleum compensations arising from sabotage, bunkering and even activities of multinational oil companies. Nigeria has become one of the most petroleum-polluted environments in the world. The impact of the oil spill include habitat degradation, pollution from gas flaring and these are cumulative and have acted synergistically with other environmental stresses to impair ecosystems and severely compromise human livelihoods and health. These unfortunate incidents make the victims individuals and host community, landowners, pond owners and other property owners to demand compensation. It is hereby recommended that the Nigerian government should set up oil pollution compensation funds that will make provision for compensation for oil pollution damage resulting from activities of not only multi-national oil companies but that of oil thieves, saboteurs and pipeline vandals. More so, legislations that will protect the environment of host communities and ensure timely adequate and fair compensation to them are to be urgently enacted.

Chapter One


1.1 Background of the Study

Recently, it was announced amidst cheers and jeers that the Nigeria Economy has surpassed that of South Africa after the most populous nation in Africa overhauled its Gross Domestic Product (GDP) data for the first time in two decades. On paper, the size of the Economy expanded by more than three-quarters to an estimated 80 trillion Naira (8488 billion) for 2013. Yemi Kale also confirms that the revised figures make Nigeria the 26th biggest Economy in the world. According to the new data, Nigeria’s Economy grew at 12.7 percent between 2012 and 2013.

Much of Nigeria’s Gross Domestic Product (GDP) is driven by oil production, which accounts for 40 percent of its GDP; since oil was discovered in 1956 till the present time it has dominated the Economy. Shell B.P and other developers in the pursuit of commercially available petroleum found oil in Nigeria in 1956.

Prior to the discovery of oil, Nigeria like many other African countries strongly relied on agricultural exports to other countries to supply their Economy.

Many Nigerians thought the developers were looking for palm oil but after nearly 50 years of searching for oil in the country, shell B.P discovered the oil at Oloibiri in the Niger-Delta. Wishing to utilize the new found oil opportunity, the first oil field began production in 1958 after that, the Economy of Nigeria would have seemingly experienced a strong increase and truthfully it has, but not without leaving behind some adverse environmental problem.
For nearly a century, petroleum production and consumption has probably brought out both the best and worst of Modern Civilization.

The industry has contributed enormously to the world Economy growth and higher standard of living in our time the mythos of oil and oil-wealth has been central to the history of Modern Industrial Capitalism, and annual oil revenue of over N50 Billion has ushered in a miserable, undisciplined, decrepit and corrupt form of petro-capitalism after over a half century of oil production from which over 400 Billion Dollar in oil revenue have flowed directly into the Federal exchequer, paradoxically oil producing states in the Federation, the Niger-Delta have benefitted the least from the oil-wealth having been devastated by the Ecological cost of oil spillage and the highest Gas Flaring rates in the world.

Oil spills in Nigeria are a common occurrence, it has been estimated that between nine million to 13 million barrels have spilled since oil drilling started in 1958 . The Government estimates that about 7, 000 spills occurred between 1970 and 20047. Spills take out crops and aquaculture through contamination of the ground water and soil. Drinking water is also frequently contaminated, and sheen of oil is visible in many localized bodies of water. If the drinking water is contaminated, even if no immediate health effects are apparent, the numerous hydrocarbons and chemicals present in oil represent a carcinogenic risk. While offshore spill which are usually much greater in scale, contaminate coastal Environment and cause a decline in local Fishing Production.

The people of Niger-Delta live in extreme poverty even in the face of great material wealth found in the waters by their homes. According to Amnesty international 70% of the six million people in the Niger-River Delta live off of less than 3 USD per day for many people this mean finding work in labour market, which is in many instances hostile to them.

The people of Niger-Delta have been greatly affected by oil spill but worthy of note is the fact that it is not only in the Niger Delta region that oil spillage occurs. Oil spillage occurs from oil tankers across the states in Nigeria, due to breakdown of operations of refineries in the country, oil tankers transport petrol and kerosene from the Southern parts to the Northern parts of Nigeria.

Thousands of lives have been lost when oil tankers spill the product they carry and properties worth billions of Naira lost, oil producing communities have continually live in poverty and serious health hazard resulting from Environmental degradation caused by oil spillages.

Over the years, many civil society have called on the Federal Government to come to the aid of these communities and to curtail the excesses of oil producing companies, to this moment little have been achieved by this call. The question then is asked, what are the liabilities of oil companies to producing communities who perpetually suffered from its activities? Who compensates them? It is an undisputable fact that Nigeria Legislations are weak and are rarely enforced thereby allowing oil companies in essence to self regulate and get away with all acts of
environmental degradation as caused by their activities.

It is on this premise that this project is set out, to critically examine the activities of oil companies, to also examine various Nigeria Environmental Laws, Judicial stand on compensation claims arising from spillage, the justifiability or otherwise of militancy and the campaigns of Environmental right activists.

1.2 Statement of the Problem

Environmental degradation takes diverse forms, ranging from pollution and destruction of the Ecosystem to degraded fresh water supplies and arable land.

The constant Environmental damages as a direct result of oil spill in Nigeria and lack of reasonable measures of restoration to the victims is alarming. The international agenda often focuses on broad-based concerns of Environmental degradation such as desertification, climate change and Air Pollution. However, for the world’s most vulnerable and marginalized groups, issued of Environmental degradation tend to be more localized and immediate in their nature.

Environmental Degradation due to oil spillage being suffered across the country most especially in the Niger-Delta usually resulted more often than not in decreased Production, for example reduced Soil Fertility may produce lower yields and deteriorated water quality can impact on Fishing. These problems are of great concern to the oil producing local communities and have direct impact on their livelihood, food security and health.

The cogent question to be asked at this juncture is who bears the responsibility of compensating the victims of oil spill, would it be the oil company or the Government? So many Nigerians have lost their lives in the struggle to ensure adequate compensation to oil spill victims. How long would the local communities endure this untold hardship? Are the oil companies and the Government literarily drilling dry these local communities with out giving any thing in return? Thus, this project would discuss, analyze and critically examine the urgent need for a legal frame work on compensation of oil spill victims in Nigeria and by judicial review examined on whose the liabilities lies for compensation; the oil companies or the Government.

1.3 Aims and Objectives

The main objective of this project is to examine problems associated with compensation of oil spill victims in Nigeria, to analyze and evaluate natural oil resources extraction, its impact on the Environment and its effect on Development in the Niger Delta communities; this would be reviewed in the context of world system analysis and theories.

1.4 Scope of the Research

This thesis will be focused primarily in analyzing the devastating effect of oil spillage on the Environment and its effect in the oil producing communities of Niger-Delta region and Nigeria as a whole.

We shall also examine Nigeria legislation on oil spillage, the judicial view on compensation claims of victims of oil spillage.

1.5 Research Methodology

This paper relies on both the primary and secondary sources. The primary sources that will be relied upon are the various petroleum Laws/Act, Environmental Laws/Act and case Laws as it bothers on oil spillage and compensation claims.

This thesis also relies on secondary data that are sourced from textbooks, journals, articles, periodicals, magazines, news items and internet.

1.6 Literature Review

There are quite a number of articles and Journals that have been written on Environmental degradation caused by oil spillage, the suffering and neglect of the oil producing communities but only few make an exposition into the causes if oil spillage, Judicial attitude on compensation claims by the victims of oil spillage and the burden of proof before compensation is awarded.

LADAN M.T. in his book Biodiversity, Environment litigation, Human Right and access to Environmental Justice dwelt basically on Environmental rights, sustainable development in Nigeria and inaccessibility to Justice when it comes to Environmental matters. Adekunbi Imoseni and Nzeribe Abangwu in their article;

Compensation of Oil Spill Victims in Nigeria: The More The Oil, The More The Blood focuses more on the factors militating against compensation of oil spill victims in the Nigeria oil industry, they wrote extensively on corruption in the oil industry, oil bunkering, militancy, pipeline vandalism and sabotage. Again they did not discuss the judicial stand point on matters of oil spillage.

This study will therefore look at the adverse effect of oil spillage on producing communities, compensation claims of victims of oil spillage, who pay compensations to oil victims? the oil producing companies or the Government? The various program of Environmental and Human rights activist, its successes or otherwise.

1.7 Justification

Oil spill is the leakage or discharge of petroleum onto the surface of inland or coastal water. It assumes disastrous dimension when an uncontrollable well blows out or pipeline ruptures

The magnitude of crude oil pollution and damages occasioned by multi-national oil companies operating in Niger Delta region of Nigeria is incredible. The growing trend of oil discovery in many countries of Africa and news of the discovery of oil and Gas deposits in the Anambra/Kogi basin is throwing attention once more in the potential of many more states within the Nigeria Federation to join the league of oil producing states within the shortest possible time.

With this blessing comes with it an equal level of curse in the form of oil spillage, if and when oil is discovered in the lake – Chad then the issue of oil spillage and Environmental degradation would yet again be a frontline discussion.
It has become paramount to look at his new development and to critically examine how the Niger-Delta communities had feared, what remedy is there for victims of oil spillage, how viable is the Nigeria legislation as it relates to Environmental degradation occasioned by oil spill and provision of compensation to oil spills victims.
This study after its conclusion will be of great addition to literary work and be of immense assistance to Students, Lecturers, Legal Practitioners and Policy makers.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

The importance of oil deposit in any society or nation can never be overemphasized as it has over the years contributed enormously to would economy growth and a higher standard if living for every country that are so blessed, on the other hand the downside of petroleum development has left a profound adverse effect on the global environment. Nigeria is no exception.

The people of Niger-Delta live in extreme poverty and continuous environmental degradation.

Given the overwhelming role of oil in Nigeria national economy, the policies and practices of the oil companies are important factors in the decision making of the Nigeria government. Because the oil companies are operating joint ventures with the government they have constant opportunities to influence government policy, including with respect to the provision of security for the oil facilities and other issues in the oil producing region. All the oil companies operating in Nigeria share this responsibility to protect and preserve the environment.

In addition to these general responsibilities, the oil companies have specific responsibilities to protect the environment in connection with their operations, the responsibilities must be seen against the context of oil production in Nigeria and in fact that the environment needs to be sustained to keep the oil flowing benefits the Nigeria government, the oil companies and the communities.

5.2 Conclusion

Spilled oil poses serious threats to fresh water and marine environments, its affects surface resources and a wider range of subsurface organism that are linked in a complex food clean that includes human food resources. Spilled oil can harm the environment in several ways, including the physical damages that directly impact wildlife and their habitats (such as coating birds or mammals with a layer of oil), and the toxity of the oil itself, which can poison human organism.

Nigerians, the Niger Delta people in particular has suffered and are still suffering from continuous incident of oil spill in their environment, this has greathly affected their life style and pose a continuous health challenge on them.

Nigeria has become one of the most petroleum polluted environments in the worlds the impact of oil spill include but not limited to habitat degradation, pollution from gas flaring.

These unfortunate incidents make the victims individual and host community, land owners, pond owners and other property owners to demand compensation. A lot has been done by the Nigerian government in ameliorating the plight of victims of oil spillage but much more still needed to be done if we are to once and for all control the incidence oil spillage.

The Nigeria legislation at the moment are week in the provision for the protection of prevention of environmental degradation and compensation of victims of oil spillage

5.3 Recommendations

Oil Pollution Compensation set up by the Federal Government that will make provision for Compensation for Oil Pollution damage resulting from activities of not only multinational Oil Companies but that of Oil thieves, Saboteurs and Pipeline Vandals.

Legislations that will protect the Environment of host Communities and ensure timely, adequate and fair compensation are to be urgently enacted. The passage of Petroleum Industrial Bill (PIB) has been long overdue and no wonder Kingsley KuKu, special adviser to the President on Niger – Delta and Chairman of Amnesty Program said that:

“people should not play politics with the PIB for it brings love for the future of the Oil Sector in Nigeria and accountability by all Stakeholders”.

Furthermore relevant Government Ministries are to come up with administrative Policies that will ensure that Oil Spillage Victims are compensated on time, fairly and adequately. Immediate necessary Environmental efforts to be made by the Oil Company after any Oil Spill, the multi – national Oil Company must effectively attempt to rectify the harm caused to the victims of Oil Spill. Payment of compensation presents an opportunity for the Oil Companies to address and repair some of the Environmental damages. Oil Companies should endeavor to have flexible attitude towards determining adequate Compensation values for Claimants. Opportunities for Information and Communication are to be increased so as to appease victims.

Oil companies are to secure their pipelines so as to prevent Oil theft, sabotage and vandalism by using helicopters for daily surveillance. This will ultimately prevent Oil Spillage by these activities and the issue of victims not being compensated due to these activities will not arise at all. NNPC pipelines are to be guarded by Government Security Forces to avoid Oil theft sabotage and Vandalism (though the NSCDC) are doing a great Job at the moment so as to avoid Oil Spillage.

Oil Companies in Nigeria do not operate according to the robust International, Social and Environmental Standard most of them still use obsolete equipment in operation and this also cause Oil Spillage. Multinational Oil Companies in Nigeria should change all the obsolete equipment of Operation to current and Modern ones to avoid Oil Spillage since it is better to prevent Oil Spillage than to pay Compensation after degradation to the Environment. Eventually, high rise in case of severe Pollution of air, Land and Water with disastrous Impacts on health and livelihood will decrease.

Inadequate Inclusion of Communities in decision affecting their lives by both Government and Multinational Companies especially on Issues of Compensation should stop.

To avoid the heavy financial burdens and prolonged stress suffered by private citizens obliged to go to court to win Compensation, Government should take over the case on behalf of the claimants and stop taking sides with the multinational Oil Companies, to provide the victims with legal aid to pursue claims which in the opinion of an independent valuer, are reasonable and have a fair chance of success. Government should constantly relieve Pollution victims of the stress and Financial hardship that currently accompanies attempt to win fair Compensation through litigation or arbitration.

If all these recommendation is put to use, there will be a noticeable Improvement in Nigeria Oil Industries and incidents of Oil Spillage in Niger – Delta and Nigeria as a whole will be at its minimal.

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