A key emerging resource expected to drive regional development in southern Nigeria is the 140 kilometre oil sands, or bitumen, belt that stretches across Edo, Ondo, Ogun, and Lagos states. Estimated by the Nigerian Ministry of Solid Minerals Development to contain 32-47 billion barrels of oil, Nigeria’s reserves of bitumen are the largest in all of Africa. The belt is situated near the edge of the Niger Delta, an area the United Nations Environment Programme calls “one of the most polluted places on earth”. Criss-crossed with the leaky infrastructure of the lucrative oil and gas industry, the pollution throughout the delta is a warning of what can happen when extractive industries operate with impunity.
What are oil sands?
Oil sands and extra-heavy oils are unconventional oils that are generally more costly to extract, transport, and refine than lighter, conventional oils. As conventional oil reserves decline, international companies are increasingly turning their attention towards unconventional oils to meet rising demand for petroleum products.
Oil sands are made up of sand grains encased in water and clay, and surrounded by bitumen, a very heavy oil. The bitumen can be removed from the oil sands and used in road construction, or upgraded into synthetic crude oil.
Nigeria’s Ministry of Mines and Steel Development has identified three potential methods of bitumen extraction in Nigeria:
(1) small-scale surface mining
(2) large-scale surface mining and
(3) in-situ extraction.
The depth of bitumen below the surface determines which extraction type is possible. Both in-situ and large-cale surface mining operations are most likely to extract bitumen for upgrading into synthetic crude oil and/or other petroleum products. Bitumen from small-scale surface mining is likely to only be economical to use for paving roads.
Will oil sands development happen soon?
Oil sands development in Nigeria has progressed in stops and starts since the first major study in 1974. Development is currently stalled. Recently, a strategic framework to identify which investors are technically and financially capable of oil sands development in Nigeria was conducted. The resultant document has not yet been made public.
What should be done?
While significant focus has been placed on improving legislation surrounding resource governance in Nigeria, there is also a need to build institutional capacity to pre-emptively plan for future resource development and optimize use of resource revenue to improve the landscapes of communities that may be affected. Nigeria is currently considering exploiting its large bitumen reserves. A serious lack of publicly available information about the potential social and environmental effects of bitumen development mean it is impossible for stakeholders – including the government, local communities, and industry – to anticipate future bitumen development and engage in preemptive planning. The development of Nigeria’s oil sands poses an important challenge for resource governance – can Nigeria avoid repeating the mistakes made in the Niger Delta and instead develop a more transparent, inclusive, and participatory planning process for bitumen development?
Article by Christina Milos, Fulbright Fellow.