Scholarly and public analyses of state-community conflict in resource-rich communities, especially in Nigeria, often portray the compensational practices of the state and extractive enterprises as unjust and unsustainable. According to this view, at least three issues foreground the “unjustness”, namely: a) Inadequate compensation of land owners when land is expropriated or degraded in the process of natural resource exploration and production; b) inadequate periodic rents paid by extractive firms to land owners; and c) lack of, or inadequate socio-economic infrastructure in the host communities of extractive operations. Most analysts have therefore argued for a revamp of the compensation system and have presented the inadequacy of compensation as the underlying cause of conflict in Nigeria‟s mining communities (see Frynas, 2000b:208; Okoji, 2002:205). This thesis subjects the compensation discourse to a closer examination, especially against the backdrop of underdevelopment, pervasive poverty, environmental damage and continuing corporate-community conflict in Nigeria‟s resource-rich rural communities. The main argument is that, because of some of its underlying neoliberal assumptions, much of the compensation discourse is flawed – which is why the discourse obscures the true character of state-community and corporate-community conflict. This more so, because the discourse relies mainly on post-colonial (that is, post-1960) experiences and contemporary advocacy literature, ignores the interplay between history and contemporary developments in state-community relations, and treats compensation as an independent variable. Drawing on the concept of collective memory, and utilising historical, ethnographic and survey data from two of Nigeria‟s oldest petroleum and coal-mining communities, the thesis examines how the evolution of the Nigerian state and collective memory about aspects of that evolution have shaped state-community relations in the extractive sector. It situates state- iii community resource-related conflict within the wider socio-historical matrix of state and community contestations for ecological and natural resource sovereignty. The key finding of the thesis is that within the context of socio-ecological rights, compensation demands by local communities are textured. In the case of the communities selected for the study, such demands are often made outside, rather than within, local ethnographic ideas of “justness” and “fairness”. Hence, land-related grievances associated with natural resource extraction persist, regardless of whether or not local demands for compensation are “adequately” met by the state and extractive corporations. The thesis enriches and extends our understanding of natural resource conflict by privileging both the sociological and historical contexts of the conflict and raising questions about the dominance the state enjoys over local communities and indigenous ecological spaces.