Nigeria discovered petroleum in the time of the colonial era. In 1914, during the time of the British colonial masters, they issued an ordinance which made Nigerian petroleum a legal property of britain. Shell D' Archy was British government sponsored company which was given the right explore all minerals and petroleum in the whole country. Shell company also discovered petroleum in a sizable quantity at oloibiri, bayelsa state. The right given to shell British petroleum ( shell BP ) was broken in 1960s when other firms like Texaco,Mobil and Gulf obtained the right to Nigerian oil.
The Nigerian government nationalized the oil industry by making a decree which brought about Nigerian national oil corporation. In May 1971, it gave the the Nigerian government a measure to be a legal control over the oil industry, so far the government to have control over the oil industry in Nigeria which made har to join OPEC which made made it necessary that a country need to have at least fifty one percent control over it's oil production. After the joining of OPEC Nigeria had a systematic and upward movement in their oil production. In 1974, Nigeria had 55% participation in the oil sector. In 1975, Nigeria had 80% participation in it's oil production while the states has 20%. In 1979 , the government merged the Nigerian National oil corporation (NNOC) with the ministry of petroleum to form Nigerian National petroleum corporation (NNPC). This agency was given the authority to control all activities in the Nigerian petroleum sector.
NNPC acts as a watch dog over the Nigerian oil industries while at the same time partnering with foreign oil companies which operated in Nigeria which includes: shell petroleum development company of Nigeria, Chevron Nigeria limited, mobile producing Nigeria limited, Nigerian Agip oil company limited, Elf petroleum Nigeria limited, Texaco company.
Petroleum has contributed positively to Nigerian economy in some ways such as: infrastructural development, improved standard of living, Employment opportunities, improved balance of payment, provision of local energy needs.
Petroleum has also made a negative impact in Nigeria such as: Neglect of agriculture, political instability, High inflation rate, loss of lives and property.