The Growth of Nigeria’s Oil Economy

Ambit Energy Corporation pic
Ambit Energy Corporation
Image: ambitenergycorp.com

Nigeria is currently Africa’s largest oil producer, laying claim to the 11th-largest quantity of oil reserves in the world, drawing investors like the Ambit Energy Corporation to build and expand Nigeria’s energy industry. The Nigerian government has regulations and limitations in place to favor indigenous oil companies over international ones, though the Ambit Energy Corporation, founded and owned by a dual Nigerian-Canadian citizen, has the unique opportunity to bypass many of these restrictions while still benefiting from its international presence.

Nigeria’s oil industry began in 1956 when oil was found in the Niger Delta after a half-century of exploration. Two years later, Nigeria’s first oil field began operations under the control of Shell-BP, with other foreign companies allowed to join in their own explorations after 1960.

The Nigerian civil war that began in 1967 concluded in 1970 as the world’s petroleum prices rose, and Nigeria saw the profits from its oil sharply rise. Just prior to this, Nigeria’s Petroleum Act established exclusive control over its oil resources. Nigeria’s state-owned oil company, the Nigerian National Petroleum Corporation, was formed in 1977.

Throughout the following decades, Nigeria would increasingly pass regulations to keep profits as close to the Nigerian people as possible. Oil exports, worth nearly $42 billion in 2015, now constitute approximately 90 percent of Nigeria’s gross earnings, overtaking the formerly dominant agricultural industry. These numbers could grow substantially higher over the next several years, as Nigeria looks to establish the infrastructure needed to harness its considerable natural gas resources.

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