Petroleum Industry A Stiff Neck Competition

Oil has often been referred to as any economy’s lifeblood. Although this is an overemphasis, oil has been the key, nonhuman resource of the economy throughout the largest part of the 20th century. In the book “The Prize: The Epic Quest for Oil, Money, And Power” by Daniel Yergin, the author illustrates the political, societal, economic, and geo-strategic importance of this product.

Niger Delta region, placing the Nigerian oil output down to a third of its capacity” (Klare 3).

Middle East is strategically important region where mostly world half of oil reserves are located. Three countries: Saudi Arabia, Iran and United Arab Emirates accounted for 57% of total Middle East liquids fuels production. (Liquid fuels production in Middle Eastern and North African countries n.d.) Although due to increased domestic production of petroleum and natural gas, the United States is reducing its dependence on foreign oil with imported liquid fuels, but still oil means a lot to the US as oil prices is determined internationally by what is available for all global consumers. Therefore, to safeguard the security of Oil supply in the Middle East and ensure stable access to affordable oil is in the vital interest of the America. (Mexican crude oil shipments to Europe and Asia are rising as U.S. imports fall

Monopolies have been around America since its beginning. Some of the first monopolies are the reason for America’s advancement that lead us to become one of the greatest countries in the world. But, what is a monopoly? The book, Economics: Private and Public Choice defined it as “a market structure characterized by (1) a single seller of a well-defined product for which there are no good substitutes and (2) high barriers to the entry of any other firms into the market for that product,” (Gwartney, Glossary). Though, the laws of the land are in place to help the government ensure that big business will not control certain industries again. Looking forward to present time, we are now seeing similarities between the big business monopolies of

The oil industry is full of economic booms and busts. Recently, the industry is in a downturn and the price of crude oil has dropped significantly. In recent times, the price of oil has dropped by more than 40% since June 2015. This crash came after nearly five years of stability and the economies hardly hit by this downturn are oil-exporting countries such as Russia, Nigeria, Iran and Venezuela. In the past one year and a half, oil prices have been cut in half and oil executives have predicted it will be years before oil prices return to $100 per barrel. The major causes of the downturn are the declining prices of a barrel of oil, which is as a result of the strong U.S. dollar, oversupply, OPEC and declining demand.

For example, Shell Oil, an MNC (Multi National Corporation), extracted 50% of Nigeria’s yearly crude output, and 14% of its own output from the Niger delta region (The Changing Nature of Third World Exploitation, 1995). Though a large number of the local populace was recruited by Shell to serve as the basic labor force, there has been no change in the deplorable conditions the locals were living in. Over a period of 15 years, due to massive and widespread oil spills, heavy land degradation of the alluvial soil has taken place. The locals, who come from an agriculture based society, have in effect, been deprived of their ancestral way of life, their heritage, all due to the greed driven actions of the partly

In 1956 oil was discovered in the Niger Delta, which is located in the southern region of Nigeria, near the Atlantic Ocean. The government nationalized and centralized the commodity, which lead to increased opportunities for corruption and patronage in the government. Militant groups actively destroy pipelines and set the oil on fire as a message to the government that they have access to the pipelines and will continue to sabotage them until a change is made to alleviate poverty and better the local populations. One Nigerian man is quoted saying, “what comes out of the ground, makes Big Men”.

The oil age has become an age of inequality. The discovery of oil has brought the wealth of a few people, and has brought misery to most people. Many oil rich countries suffer from the distortion of the economic development, the financial instability, the increasing gap between the rich and the poor, the serious

Nigeria, with a population of 190,584,690 people is the most populous country in West Africa. Marked with huge reserves of oil and natural gas, oil exploration in Nigeria first began in the year 1908, with long breaks during the first and Second World War. After the further discovery of commercial oil fields in Oloibiri in 1956, crude oil has since being produced in large quantities. Today, the country produces a maximum capacity of 2.5 million barrels of crude oil per day, and is the world’s sixth largest producer of crude oil. Crude oil export, accounts for 90% of Nigeria’s earnings. Oil exploration occurs onshore, on land and swamps, while off-shore operations occur mainly in water depths reaching 2500m. Currently, crude oil is

The "Curse of the Black Gold" is what they call it. The greasy money-making liquid can also cause the undoing of countries. Oil companies like Shell sometimes make as much money as the country they do business in. The hazards that come with extracting oil is understated while the rewards are often praised. To the companies, we are not important, it is the money we carry in our pockets that they care about. Shell, a billion-dollar making oil company, is slowly gaining a lot of recognition in countries as it is causing a lot of corruption due to several accidents as well as its influence on global warming. The company is most known for its fracking practices as well as its impact on Nigerian villages.

In 1994, Equatorial Guinea was one of the most impoverished countries in Africa. During that time, the country had an incredibly low life expectancy of just 46 years, and the inhabitants were forced to survive on only $1 a day. Then, in 1995, they discovered a natural resource that would have the potential to change their economic well-being and quality of life forever. In this year, Equatorial Guinea discovered an immense amount of oil right off the coast of the country. Just nine years after this finding, all major US oil companies, notably Exxon-Mobile, Marathon Oil, and Amerada Hess, were drilling for oil in this once poverty-stricken country. After this notable discovery, Equatorial Guinea was generating $4 billion in revenue per year solely from the oil drilling industry. However, the inexperienced leaders that governed the country entered into a contract where they agreed to give 80%

Nigeria consumes about 30-33 million liters of petrol per day, although it was exceeded on the 12th of August 2016 to 41million liters of petrol (NNPC news update, 12th August 2016); gasoline is the single most important distillate of oil, accounting about 45% of petroleum products (EIA 2006). Although it was projected by the EIA (2006) that oil consumption will increase to 26 million barrels per day in the USA by 2025 (with share of imports almost constant), they(EIA) predict oil use relative to GDP will fall by around 30%, because of improvements continuously made in efficiency in energy and overall growth in the economy.

Most children in the Niger delta have little or no education, due to lack of funds from their parents who have lost their lands and have no jobs because of limited opportunities. The Niger delta government and the oil companies have refused to look into the situation; instead they favor their close relations neglecting the masses. Corruption in the Niger delta has led some youths in taking drastic measure in order to put food on their table. For example, Ikechukwu Efe an indigene of the Niger delta said that some of his friends created their own “oil refinery”, which is made up of crude oil in metal barrels with controlled heat from fire woods. This is a dangerous process in refining crude oil but the degree of poverty in the state left his friends with no choice. If only the government of the Niger delta have created jobs with the wealth of the state Ikechukwu’s friend would not have to put their lives in danger. Until corruption is put to an abrupt the people of the Niger delta will continue to live in poverty.

Oil companies operate in defined regions where oil exploration and possible drilling is done. However some companies such as Shell BP engage in international drilling and distribution of oil products. Below are some of the most renowned oil companies in their constituent continents: Africa: Sasol of South of South Africa and National Petroleum Company of Congo. In Asia some of the leading oil companies include Nobel Group and the Bahrain Oil Company. It is important to note that Asia has a lot of oil resources and hence have extensive oil drilling activities. In Europe we have Partex oil and Gas Company, in South America three is Bridas Corporation based in Argentina. North America has one of the most advanced technology in the oil industry. These companies have extended their activities around the globe in a bid to discover more oil resources to sustain future energy requirements. Some North America companies include Shell Oil Company and the Apache Corporation. This paper will focus on the importance of oil companies over and above the problems that they pose to the environment as well as the political stability of the world. For practical examples I chose to use the state of Alaska where oil companies have based their operations as a case study.

Oil production in Nigeria’s Niger Delta began in 1956. Ever since then, the Delta communities have recognized unrest as oil was being distributed in profitable quantities. Oil has been Nigeria’s leading export product for more than six decades. Even though, oil has given Nigeria a tremendous economic boost, nearly sixty percent of that oil production has been carried out under Shell’s regulation, and during these past six decades, there has been enormous environmental degradation because of frequent oil spills and gas flaring. This has led to a polluted fish ponds and declining growth of crops in Niger communities. Shell has personally financed Nigerian militants to insure the production of oil, and this has led to brutal murders and illegal executions of community members who tried to protest the damages that shell was creating to their environment. So why and how is Shell still operating and still committing human right crimes in Nigeria? This paper will explain why Shell has dominated Nigeria since the 1950s, how the company has damaged the lives of numerous communities, insured the production of oil to this day through militant use, and still managed to separate themselves from the many years of violence that they founded.