Shell Nigeria
In 1958 the Royal Dutch/Shell Group started drilling for, transporting and refining oil in Nigeria. Nigeria’s large supply of high quality crude oil helped Shell climb to the top, by 1994 Shell made more money than other company in the world. Everything changed for
Shell in 1996 when the world became aware of their unethical business practices in
Nigeria. Shell had raped the environment, violated human rights of the Nigerian people and manipulated local governments for profit.
Royal Dutch/Shell Group and Nigeria
Royal Dutch/Shell Group is the most successful large corporation in the world. In
1994 it recorded profits of nearly 6.2 billion dollars on revenues of 94.9 billion. Shell, a
British import and export company, began in the oil business in 1907 when it merged with
Royal Dutch Petroleum. In the 1930’s Shell started exploring for oil in Africa. It was not until 1956 that they found oil, one of the largest reserves in the world, in the delta region of Nigeria. While Nigeria was still under British rule, in 1958, Shell started oil production, setting up drilling facilities, pipelines and refineries.
Nigeria gained freedom from British rule in 1960 and have struggled for identity.
Like most eastern countries that rely on one source of income Nigeria has had major economical turmoil. Since 1970 the country has suffered through seven military coups, several of which were bloody. Several attempts have been made at democracy with each being overturned by a military coup. In the 70’s the Shagari government tried to use oil income to fund an ambitious economic development program called “green revolution”.
The largest focus was to lower the amounts of their main imports, food, textiles and manufactured goods, by producing them internally. The philosophy worked until the price of oil plummeted. Cutting their budget from 20 to10 billion, this resulted in a massive recession that caused a bloody military coup in 1990.
Environmental Issues
The oil industry can never operate without having a detrimental effect on the environment, but many people say that the environmental destruction in Nigeria is much greater than that in other countries where the oil industry operates. Oil spills, gas flaring, and poorly situated pipe lines form m...
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...e forces the government has issued to protect Shell’s interests have to cease the brutal and violent acts against protesters. A environmental impact assessment needs to be made by a third party. Shell has published some of their assessments of the area, but an independent research has to be done by someone who has no company loyalties. This must be followed by a study to insure that all areas are completely cleaned up. Monetary compensation for loss of land, resources, income and life to people in oil producing regions in the Niger Delta who have experienced environmental devastation and human rights violations. Finally, Shell must learn to respect the views of communities in the regions it operates in.
Works Cited
Post, J., Lawrence, A., & Weber, J. (2000). Contemporary business issues.
[Customized for the University of Phoenix.] Boston: McGraw Hill.
Greenpeace staff writers (1998). Shell-Shocked the environmental and social costs of living with Shell in Nigeria[Online]. Available: http://www.greenpeace.org/~comms/ken/intro.html Encarta 98 (1998). [CD-ROM]. Seattle, WA: Microsoft Corp.
As America’s first billionaire, few individuals in history can compare with John D. Rockefeller Sr. His wealth around the turn of the 20th century would be worth roughly twenty-two billion dollars in modern United States dollars. It is undeniable that Rockefeller changed the landscape of the American petroleum industry by defining the nature of oil production. By 1883, Rockefeller was laying the foundations for what we now know as the vertically integrated company and the modern multinational. The fruit of Rockefeller’s labor, the Standard Oil companies, controlled ninety five percent of petroleum refining and transport by 1880.
Royal Niger Company, commissioned by the British government to administer and develop the Niger River delta and surrounding areas, standard from signed by multiple African rulers, 1886.
Oil has always been a coveted natural resource. Oil was discovered in the United States in 1859; since it was a young industry, it was without any structure. That is where John Davison Rockefeller stepped in. John Rockefeller was at one point one of the richest men in the world, monopolizing the oil industry which played a major role in shaping the economy.
Oil was first discovered in the mid-seventeenth century by Spanish explorers. July of 1543 Spanish explorer Luis de Moscoso saw oil floating on the water in the Galveston Bay (Olien 1). In the beginning there was no market or demand for oil until following the Civil War period, entrepreneurs begin digging wells. The first significant oil discovery in Texas was in 1894 in Navarro County near
Gambrel, Jon. “Nigerian Rebels Seize Seven Oil Workers”. Sydney Morning Herald. Retrieved on 21 Nov, 2011 from
This is especially obvious within the context of the lower Mississippi Delta, where for many Louisianans; oilrigs provide them with jobs. Humans are dependent on oil as one of Earth’s limited resources, and it is central to our way of life: transportation, heating fuel, electric generation, common materials, and even plays a role in making our food (Catherine Gautier). The economic profits of oil are many; new technologies and innovations with oil as a key contributor are making for a prosperous future.
Oil-Led Development: Social, Political, and Economic Consequences. CDDRL Working Paper 80. Robinson, J. A., Torvik, R. & Verdier, T. (2006). Political Foundations of the Resource Curse. Journal of Development Economics, 79, 447-468.
" Oil is the life blood of our modern industrial society. It fuels the machines and lubricates the wheels of the world’s production. But when that vital resource is out of control, it can destroy marine life and devastate the environment and economy of an entire region…. The plain facts are that the technology of oil-- its extraction, its transport, its refinery and use-- has outpaced laws to control that technology and prevent oil from polluting the environment…" (Max, 1969). Oil in its many forms has become one of the necessities of modern industrial life. Under control, and serving its intended purpose, oil is efficient, versatile, and productive. On the other hand, when oil becomes out of control, it can be one of the most devastating substances in the environment. When spilled in water, it spreads for miles around leaving a black memory behind (Stanley, 1969).
If Africa were a pistol, Nigeria will be the trigger. The country is strategically located on the western brink of the black Continent. Nigeria is bordered by the Gulf of Guinea, between Benin Republic on the west and Cameroon on the east. The country’s location has been of immense benefits as it is an action point for the continent. It is also bounded by the Atlantic Ocean making it more accessible for importation and exportation.
Mail and Guardian (2013)Nigeria’s dangote uses $3.3bn loan to build Africa’s biggest oil refinery .6:23.Available at: http://mg.co.za/article/2013-09-05-dangote-33bn-refinery-to-turn-nigeria-into-oil-exporter [Accessed: 5 September 2013]
Nigeria is located on Africa’s western coast. It borders the Gulf of Guinea and the countries Cameroon, Chad, Niger and Benin. With a history that dates back to the fifth century B.C., Nigeria has many ancient cultures and pieces of art. Nigeria contains more historic cultures than any other African country or region (Africa: Nigeria; History World). After becoming independent in 1960, Nigeria is now Africa’s most populated country with large petroleum and oil industries (World Factbook: Nigeria).
The measure of petroleum abundance and production in Nigeria is measured by the United States. According to the statistical data and the U.S. measures, Nigeria reserves make the country the tenth petroleum-richest nation, and by far, one of the most affluent countries in Africa. In the middle of 2001 its crude oil production was averaging around 2.2 million barrels per day. Though, there is a very prominent market for offshore rigs, nearly all of Nigeria’s primary reserves are in and around the delta of the Niger river. Ever since Nigeria became independent, it is one of the few oil producing countries that can increase its oil output drastically. The g...
The oil companies are using a structured power approach while addressing the land use issues with the locals. The oil companies use formal authority, legal prerogative, and association to strengthen their side of the conflict. The Nigerian government has a history of being influenced by foreign money and influence, which gives big business a huge advantage over monetary decisions. The Nigerian government has gone as far as creating laws and legislation to benefit the oil companies because of the significant economic contributions the companies bring to the country. Omeje (2005) states “Oil is the mainstay of Nigeria’s economy and the state is largely dependent on oil rents, taxes and royalties paid by transnational oil companies (TNOCs) and on profits from its equity stakes in the TNOCs’ investments.”
Indonesia dates back to 1871, with the first commercial production beginning in 1885.” The success of one of the very first wells, drilled at Telaga Tunggal in 1885, triggered the explosion in the Indonesian oil industry. At a depth of only 121 meters, this well was producing commercial quantities of oil. This immediately led to further exploration and drilling of new oil fields throughout the region. The Royal Dutch Company and Shell Transport and Trading were the first two companies to spearhead the start of the oil industry in Indonesia. In 1890, the Royal Dutch Company was created to produce and refine oil as Shell Transport and Trading focused on the marketing and transportation side of the market. They merged in 1907 to form Royal Dutch Shell. In the literary work, “Earliest Days of Petroleum Industry in Indonesia,” it states that at this time “total production increased to 62,000 barrels per day, of which 95 percent was produced by Royal Dutch Shell.” By the turn of the century, there were about twenty companies exploring, if not already producing, oil in Indonesia. However, Royal Dutch Shell and the U.S. companies Stanvac and Caltex dominated the industry in Indonesia in the first half of the twentieth century. The major oil fields included Kruka and Ledok in East Java, Kampong Minyak and Sumpal in South Sumatra, and Perlak in North Sumatra. With these abundant fields and other new fields being discovered, crude oil production reached a new high in 1939. The production of crude oil reached 170,000 barrels per day, while approximately 180,000 barrels were being refined each day. As a result, nearly 75 percent of crude oil in the Far East came from I...
The oil companies had to get the oil that was found in the south and then refine this oil to make it ready to power the automobiles.(Automobile 814) Due to this high demand of oil for the use in automobiles, the oil companies, such as Standard Oil, could impose a high price on oil. (Jones, 112) This high price caused the oil companies to obtain a large profit, which i...