Nigeria Relies on Oil Despite Having Large Coal Reserves

Spotlight Activity: Nigeria Relies on Oil Despite Having Large Coal Reserves

Nigeria still holds large coal reserves, estimated to be at least 2 billion metric tons. The discovery of bituminous coal suitable for use in coke production for the iron and steel industries opens up potential new domestic markets. With the loss of its largest domestic consumers to oil, a less expensive alternative, the Nigerian Coal Corporation began exporting coal to Italy and the United Kingdom, as its low sulphur content is desirable.

According to the Nigerian National Petroleum Cooperation (NNPC), in the last decade Petroleum (oil) has maintained the top place in Nigeria’s export list, forming a vital component in the structure of the country’s international trade. Crude Oil discovery began in Nigeria in 1956 by Shell D’Arcy Petroleum while large-scale production began in 1958 at Oloibiri field, Shell’s first oil field in the Niger Delta on stream production of 5,100bpd (barrels per day).

Nigeria joined the global association of oil producers in 1971 when it became a member of the Organization of Petroleum Exporting Countries (OPEC). With an export value of less than 1% of all Nigerian exports in 1971 to a peak of 97% in 1984, Nigeria’s export value has not been less than 90% since. 2004 was a peak year where there was a resurrection of oil production to a record level of 2.5 million bpd. ( 2018)

Answer: Nigeria’s use of oil has been on the rise despite it initially producing an export revenue of less than 1% to a peak of 97%, with a minimum of 90% in the last 10 years.

Crude oil production in Nigeria averaged 1882.49 BBL/D/1K from 1973 until 2018, reaching an all-time high of 2475 BBL/D/1K in November of 2005 and a record of low of 675 BBL/D/1K in February of 1983. With observations, data increase in production at an all-time high of 2,49 BBL/D/1K in November 2005 and a record of low 1,419 BBL/D/1K in August 2016 (Trading economics 2018).

Domestically oil forms about 16% of Nigeria’s energy use. The nine top oil producing states in Nigeria are:

  • Akwa Ibom- the largest oil producer with 31.4% (504,000 BPD)
  • Delta – 21.56% (346,000 BPD)
  • Rivers – 21.43% (344,000 BPD)
  • Bayelsa – 18.07% (290,000 BPD)
  • Ondo – 3.74% (60,000 BPD)
  • Lagos – 2.64% (40,000 BPD)
  • Edo – 2.06% (33,000 BPD)
  • Imo-1.06 % (17,000 BPD)
  • Abia-0.68% (11,000 BPD) (Nigerian bureau of Statistics 2017)

Nigeria’s petroleum products are the main stay of the country’s economy. They provide the country’s main source of foreign exchange, making up more than 90% of total exports. Petroleum jobs account for 20% jobs in the country. It is hard to deny as it is obvious that petroleum (oil) has made Nigeria one of the economic leaders in Africa.

Socially, the industry has funded communities’ access to energy, enterprise development, education, health and civil society in implementation of programmes that have lasting impacts on lives in the Niger Delta region and Nigeria as a whole. 90% of funds made available to annual budgets to Niger Delta Development Commission (NDDC) come from the petroleum (oil) industry.


Status: Falling Behind

Although the Nigerian government has made efforts to diversify its economy, it still is too highly dependent on oil. Nigeria has vast mineral wealth and the potential for large-scale agricultural production that can provide alternative revenue streams for the country’s economy.  It also has the potential to derive much of its energy from renewable energy sources, such as solar and wind. The government needs to develop a plan for phasing out of oil and transitioning to a carbon free economy.

Take Action

Dr. Emmanuel Ibe Kachikwu

Dear Sir,

We are expecting urgency on the part of government to promote economic diversification from oil to non-oil sectors as promised, in order to escape a miserable situation for oil-dependent economy. The rate at which other sizeable oil interesting countries are setting deadlines for ending  the use of fossil fuel calls Nigeria to do the same.

Send Action Alert Message to:

Send Message to: Dr. Emmanuel Ibe Kachikwu

The Honorable Minister,

Ministry of Petroleum Resources,

Block D 5th-11th Floor, NNPC Towers,

Central Business District,



Telephone: +234 (1) 2790000

Learn More:

Nigerian National Petroleum Cooperation: http//>oil-and-gas-statistics>elibrary        

Newspaper article available at:’s-earnings-investigation

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