Lesson Notes By Weeks and Term - Senior Secondary 3

Term: 1^st Term

Week: 3

Class: Senior Secondary School 3

Age: 17 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Economics

Topic:-       Petroleum and the Nigerian economy

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Narrate a brief history of the development of Petroleum industry in Nigeria
2. State and explain the positive and negative contributions of Petroleum to the Nigerian economy

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

NOTE

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 to government.

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.

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 has become 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.

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.

EVALUATION:   

1. Narrate briefly the history of the development of the petroleum industry in Nigeria
2. State three positive and negative contributions of petroleum to the Nigerian economy

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively