The 1990 indigenisation policy did not choose to award oil blocks through an open bidding process, which could have ensured transparency. But maybe a bit too easy, as would become apparent soon. Transformation of the sector seemed easy enough to achieve, considering the fact that the 1969 Petroleum Act gave the minister of petroleum unfettered power to use whatever method desired to award oil blocks. The subsequent actions of the military government, however, point in the opposite direction. Indigenisation for the Connected FewĪgainst the backdrop of these realities, any attempt to transform the sector for the benefit of Nigerian society appears as a noble undertaking. However, the prized jewels remained the oil blocks from which the crude oil is pumped, and which have the biggest profit margins. The Nigerian government itself had also become a player in that subsector when it bought controlling shares in the 1970s in Esso Africa (renamed Unipetrol), British Petroleum (renamed African Petroleum) and Shell (renamed National Oil and Chemicals). There had been numerous Nigerian-owned companies in the downstream oil industry (sales, marketing and distribution) right from the 1960s, with numerous local players operating as importers, transporters, distributors and retailers of refined petroleum products. It felt that some form of local participation in the upstream oil industry was imperative and that Nigerian-owned companies should operate side by side with foreign companies and the supermajors, such as Shell, Chevron, Mobil and Eni. The military government of General Ibrahim Babangida (1985–93) considered it an aberration that there were no Nigerian companies in the country’s largest and highest-earning economic sector. It was not until 1987 that the first indigenous oil-producing company in Nigeria came into existence. Although the federal government had established the Nigerian National Petroleum Corporation (NNPC) in 1977, its participation in the upstream oil sector was through joint ventures and production-sharing contracts. However, these companies had one thing in common: they were all foreign-owned. By then, many other oil companies were active in prospecting and exploring oil in Nigeria. From a modest 5 100 barrels per day in 1958 when the field became operational, Nigeria’s oil production rose to 2.4 million barrels per day in 1974, increasing government oil revenue from N200 000 to N3.7 billion in the same period. It inherited oil blocks that had been concessioned to the company then known as Shell–BP, the sole concessionaire that struck oil in 1956. As with most developing nations that are rich in resources, postcolonial Nigeria did not have the capacity to prospect and explore its rich oil deposits by itself.

Nigeria oil blocks map