Academic journal article Journal of Third World Studies

State and Rentier Capitalism in Nigeria: The Political Economy of Hydrocarbon Nationalism and Dependence Reproduction

Academic journal article Journal of Third World Studies

State and Rentier Capitalism in Nigeria: The Political Economy of Hydrocarbon Nationalism and Dependence Reproduction

Article excerpt

INTRODUCTION

Imperial interest in Nigerian hydrocarbon started in 1908 when a German firm, (Nigerian Bitumen Company (NBC), started prospecting for hydrocarbon resources around Okitipupa in present day Ondo State. (1) However, the politics and aftermath of World War I (WWI) shut down the NBC. This development created the entrance for Shell D'Arcy to enter and commence exploration for hydrocarbon in Nigeria in 1937. It is in response to the logic of oil politics nexus that the 1914 Mineral Oil Ordinance stipulated that: "No lease or license shall be granted except to a British subject or ... a British company registered in Great Britain or in a British colony ..." (2)

Shell D'Arcy, however, built on the NBC seismic data from its inception in 1937 although the events of World War II were to again punctuate and delay exploratory and production activities. This notwithstanding, Shell drilled its first well in 1956 with the discovery of oil in commercial quantity at Oloibiri, followed with commencement of exports in 1958 after field development. Having celebrated independence and with the doctrine of nonalignment embraced, a new impetus opened the gate for non-British oil and gas companies to penetrate the upstream sector. These include: Gulf (United States); ELF (France), and Agip (Italy). The combined effects of the ascendancy of the majors, the Arab-Israeli war and the emergence of the Organization of Petroleum Exporting Countries (OPEC) and subsequent increase in the price of oil, soon triggered a blossoming market and production surge in the Nigerian industry. By 1965, daily oil production in the Niger Delta had risen to 500,000 barrels per day. Daily Production for 1970 and 1975 stood at 1 million barrels and 2 million barrels respectively.

The improved profile of oil that started in 1966 assumed a higher toll in 1971. Nigeria's entry into the Organization of Petroleum exporting Countries as its 11th member in 1971, coupled with a rise in oil price from 45 cents/65 cents to $3.22 per barrel one year after, engendered tremendous changes for the structure of the Nigerian economy and politics. In sustenance of this rising profile, the price of oil rose from $11.87 per barrel in 1975 to $38.82 in 1980. While there has been occasional fall in price, recent statistics point to a general upward trend: Bonny Light which sold for $24.20 per barrel in 2001 rose to $29.20 per barrel in 2003 followed by $55.43 per barrel in 2005. (3) Having hovered between $70.00 and $90.00 per barrel between 2006 and 2007, the price which later rose to $147 per barrel by July 2008, crashed to $44 per barrel by December 2008. The improved performance of the oil sector has engendered it s displacement of the agricultural sector. Thus, from the sector's low 2.7 per cent contribution to exports in 1960, it graduated to 73.7 per cent by 1971. Similarly, while the net value of the oil export has risen consistently, that of non-oil export has declined consistently. As the figure for oil exports increased from $30.1bn in 2004 to $41.5bn in 2005, non-oil exports declined from $758m in 2004 to $615.4m in 2005. (4)

In spite of the rise of the oil economy, Nigeria remains an extraverted state. Lacking of scientific knowledge and the capacity to create wealth through a develonic (5) approach, the state has become technologically dependent on oil corporations to drive development at home, while inadvertently incurring the paradox of plenty. The level of technological dependence of the sector is explained by its low Gross National Product (GNP) contributions to Nigerian Research and Development (R & D) profile. While the advanced industrialized states spend an average of 2.0 percent of their GNP on R & D, Africa's regional average is estimated at 0.28 percent. (6) As a result, there are 2.5 technology patents recorded per one million persons in South Africa, compared with 25 in Australia and 779 in South Korea. (7) In Nigeria, a large number of patents granted belong to foreigners. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.