The Oil Rivers Protectorate was named by the British traders referring to the abundance of oil palm which was the most profitable and important trading commodity in the region during the early 19th century. The Protectorate was established by the National African Company in 1884. By 1885, the Oil Rivers area was claimed as a British territory by the National African Company, which used gunboat diplomacy to deal with the local rulers. The British claim over the areas was confirmed at the Berlin Conference of 1884-1885. The territory of the Protectorate included the Niger Delta, which the British referred to as the Oil Rivers. After the Berlin Conference, Britain extended eastward to Calabar, where the British Consulate General was relocated from Fernando Po. This was basically in order to control trade coming from the Niger River. As a protectorate, it remained under the full control of the Foreign Office in London. In 1885 the Oil Rivers Irregulars were established as a military unit of Africans commanded by British officers. In 1891, they were renamed the Oil Rivers Constabulary. They served in several military campaigns in Northern Nigeria. In 1893, they were renamed Niger Coast Constabulary.
In 1887, Johnson who was the British Acting Consul directed King Jaja of Opobo to allow European firms and traders access to the hinterland markets. Jaja refused to cooperate with Johnson. As a result, Johnson brought a warship and invited Jaja on board. Jaja was arrested and exiled to Accra and then West Indies where he died in 1891.
In 1891, Major Claude Macdonald was appointed as the Commissioner and Consul General. The Royal Niger Company replaced the National African Company and thereafter, expanded trading influence and political control northward. Thereafter, the Oil Rivers Protectorate was formally proclaimed after palm oil that was the major export commodity. Between 1885 and 1894, the administrative centre was located at Bonny. The expansion into the large territory involved several diplomatic treaties and wars, which ultimately subdued most of the local people and their rulers. In August 1891, the British established a Consular Administration over the Oil Rivers Protectorate, consisting of six consular river districts.
In 1895, it incorporated the Oil Rivers Protectorate into the Niger Coast Protectorate.