PETROLEUM AND THE NIGERIAN ECONOMY

Subject: 

ECONOMICS

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Term:

FIRST TERM

Week:

WEEK 3

Class:

SS 3

Topic:

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Previous lesson: 

The pupils have previous knowledge of

HUMAN CAPITAL DEVELOPMENT

that was taught as a topic in the previous lesson

Behavioural objectives:

At the end of the lesson, the learners will be able to

• Enumerate the positive contribution of petroleum to the Nigerian economy.
• Explain the negative effects of petroleum to the Nigerian economy.

Instructional Materials:

• Wall charts
• Pictures
• Related Online Video
• Flash Cards

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Methods of Teaching:

• Class Discussion
• Group Discussion
• Asking Questions
• Explanation
• Role Modelling
• Role Delegation

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Reference Materials:

• Scheme of Work
• Online Information
• Textbooks
• Workbooks

Content:

PETROLEUM AND THE NIGERIAN ECONOMY

CONTENT

1. The Development of the Petroleum Industry
2. Contributions of Petroleum to the Nigerian Economy
3. The Nigerian National Petroleum Corporation (NNPC)
4. The Roles of NNPC and OPEC in the Exploration, Production, Refining, Marketing and Distribution of Petroleum Products

The Development of the Petroleum Industry

Oil exploration in Nigeria dates back to 1908 with the appearance of oil in the present Ondo state. Another exploratory activity took off in 1937 by an Anglo Dutch consortium that served as a fore-runner of the present-day Shell Petroleum Development Company of Nigeria Limited, Shell D’Arcy. Oil was first discovered at Oloibiri in Rivers state in 1956.

The most important landmarks in the history of oil development in Nigeria were the Hydro-Carbon oil refinery Act of 1965 and the Petroleum Decree of 1967. The Hydro –carbon Act of 1965 approved the license for the first refinery at Elese Eleme near Port-Harcourt, while the Petroleum Decree (1967) gave the right to fix petroleum prices.

Nigeria has since returned to this status quo since December 1998. The Shell BP undertook the preliminary geological reconnaissance and intensified its geophysical surveys in the 1946 -1951 period. In order to increase the pace of oil exploration and to ensure that the country was not dependent on one oil company or nation, Shell’s sole concession right over the country was reviewed and exploration rights were granted to companies of other nationalities. Examples of oil companies are Mobil, Gulf, Agip, Tenneco and Texaco/Chevron. They were allowed to join the explorers for oil in the onshore and offshore area of Nigeria.

The period 1975 – 1980 was considered as the golden era of the oil industry in Nigeria.

In 1977, the Nigerian National Petroleum Corporation (NNPC) was established by the NNPC Act No 33 through the merger of the Nigerian National Oil Company (NNOC) and the then Ministry of Petroleum Resources. This new body, NNPC started to perform both operational as well as regulatory functions. In 1979, Nigeria nationalized the Nigerian subsidiary of British Petroleum because it was supplying crude oil to South Africa.

EVALUATION

1. Trace the history of the Petroleum Industry in Nigeria from 1908 to 1937.
2. Write NNPC in full. When was it established?

Contributions of Petroleum to the Nigerian Economy

Positive Contributions of Petroleum to the Nigerian Economy:

1. It increases Nigeria’s National Income greatly.
2. There is increment in the income per capita of Nigerians.
3. When the first commercial shipment of oil was made in 1958, petroleum became a major foreign exchange earner.
4. As a result of provision of more employment opportunities, increase in per capita income, development of basic infrastructures, etc the standard of living of the people of Nigeria has improved.
5. Oil has played a significant role in shaping Nigeria’s foreign policy since she gained independence in 1960.

The Nigerian National Petroleum Corporation (NNPC) is the national oil company of Nigeria and is responsible for all oil and gas activities in the country, including exploration, production, refining, distribution, and marketing. It is the largest company in Nigeria and one of the largest companies on the African continent. NNPC was established in 1977 through the merger of the Nigerian National Oil Company (NNOC) and the Ministry of Petroleum Resources, and is headquartered in Abuja, Nigeria. Over the years, it has played a crucial role in the development of the Nigerian economy, and continues to serve as a key driver of the country’s economic growth and development. Some of its other important contributions to the Nigerian economy include developing local capacity, increasing government revenues, and facilitating foreign investment in the country’s oil sector.

Negative Effects of Petroleum to the Nigerian Economy

Although there were positive contributions of petroleum to the Nigerian economy, there are also negative effects which include the following among others.

1. One of the political woes of the discovery of oil in Nigeria is political instability. All the frequent coups, change of government that occurred in Nigeria had oil undertone.
2. As a result of oil exploration, together with the fear in many quarters of possible earthquake occurring in those areas, many oil producing areas in Nigeria have been eroded.
3. There is shortage of raw materials as another negative effect of the neglect of agriculture as a result of the discovery and exportation of petroleum in Nigeria.
4. Oil exploration in Nigeria has caused soil, water and air pollution in many parts of the country.
5. One of the immediate consequences of the neglect of agriculture in Nigeria as a result of the discovery and exportation of oil is the decline in food production.

Presentation

The topic is presented step by step

Step 1:

The class teacher revises the previous topics

Step 2.

He introduces the new topic

Step 3:

The class teacher allows the pupils to give their own examples and he corrects them when the needs arise

EVALUATION

1. Enumerate the positive contribution of petroleum to the Nigerian economy.
2. Explain the negative effects of petroleum to the Nigerian economy.
3. What role has oil played in shaping Nigeria’s foreign policy?
4. How has the discovery of oil affected agriculture and other industries in Nigeria?
5. What are some of the social and environmental impacts of oil exploration in Nigeria?
6. Overall, how has petroleum impacted the development and prosperity of Nigeria over the years?

Conclusion

The class teacher wraps up or concludes the lesson by giving out short notes to summarize the topic that he or she has just taught.

The class teacher also goes round to make sure that the notes are well copied or well written by the pupils.

He or she makes the necessary corrections when and where the needs arise.

Assignment 

Read about Petroleum and the Nigerian Economy in preparation for the next lesson