Even though the petroleum industry in Nigeria has become the back bone of the Nigerian economy the relationship with the communities in the oil producing area is not all what it should be. There has been a significant shift in emphasis from the earlier peaceful and cordial relationship to the present more vocal sometimes violent relationship from a few communities who would like to see the operator held responsible for all environmental lapses of the past 50 years of oil operations in Nigeria. As the leading and most visible oil producer, we experience our share of strained relations in proportion to the size and extent of Shell's operations.

Social unrest in the oil producing areas can be attributed to the frequent complaint by the communities of gross neglect by the oil producing companies and the Federal Government of Nigeria in the development of their areas. The community's feeling is that the level of compensation from environmental pollution is not sufficient to compensate the damage caused and this affects good community relations. Also, some communities feel that despite the taxes and royalties paid by multinational companies that, most of the petroleum profit from their God-given wealth is being taken away by such multinationals for development elsewhere. This feeling stems from the perceived glaring disparity between developments in the urban and rural areas where oil operations are carried out.

Oil contributes 13% of Gross National Product (GNP) and 90% of the earned foreignexchange revenue in Nigeria. As the Shell Petroleum Development Company of Nigeria Limited (SPDC) produces about 50% of the oil in Nigeria, it is appropriate to share our experience in community relations arising from environmental pollution from oil operations.

The global concern for the protection and preservation of the environment especially by the major countries like the US, Canada and some in Europe has further strengthened the resolve of pressure groups especially in developing countries like Nigeria to exert influence on Governments and industry to improve environmental control.

Environmental quality considerations will have to be accepted as essential in any policy formulation for petroleum development and to this end the Nigerian Government is committed to seeing that the oil industry is properly managed to ensure that the maximum benefit is derivable from oil revenue. It recognises that this can only be achieved with due regard to the protection and conservation of the environment, thus ensuring peaceful interaction between the oil operators and the communities among whom they operate.

This paper is an attempt to examine the social problems associated with oil exploration and production and the related environmental pollution therefrom and proffer suggestions on how such problems can be solved for good community relations.

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