Nigeria is Africa’s largest oil producer.4
Its industry is based in the Niger Delta, in the south of the country, where Shell first found oil in commercially viable quantities near the village of Oloibori in 1956, when Nigeria was still a British colony.5
The Niger Delta has since become Africa’s most valuable oil-producing region.
The industry is run by joint ventures between the Nigerian government and multinational companies. Shell has always been the most important of these. Shell runs its oil operations in Nigeria through its subsidiary, Shell Petroleum Development Company (SPDC). It is a major shareholder and the operator of the country’s largest joint venture, which produces almost 40 percent of Nigeria’s oil.6
In his memoirs, Shell’s former chief economist and prominent British politician Sir Vince Cable laid out the historic importance of Shell’s Nigeria operations:
“The upstream business in Nigeria was the jewel in the crown of the exploration and production division, the company’s elite corps. Many managing directors, past and present had served time in the Niger Delta; Nigeria accounted for one of Shell’s largest sources of equity oil (oil owned by the company rather than managed on Shell’s behalf), and a steady if unspectacular profit.”7
Shell does not publish a breakdown of its earnings by country, but this profit is certainly significant. Reuters estimated that Shell had earned 4 billion US dollars from oil and gas production in Nigeria in 2017, which was around 7 percent of its total global output.8
A vast network of pipes connecting numerous oil and gas fields now cross the Delta. Many run close to people’s homes, next to farmland and through swamps and waterways where people fish. Shell operates more than 1,000 oil and gas wells and manages a network of approximately 6,000 km of pipelines, spread over 30,000 square kilometres.9
