Investigation Into Corporate Social Responsibility Strategies for Oil and Gas Companies in Nigeria
Chapter One
Objectives of the study
There are several research objectives in the study. These are the following:
- To identify different CSR activities in the Niger Delta region from the oil and gas firms.
- The study aims to determine the key CSR activities that are being executed by the oil and gas firms in the region.
- To analyse the impacts of corporate social responsibility in the Niger Delta region.
- The research seeks to provide an understanding of the impacts of current CSR activities on the social and economic development of the region.
- To provide recommendations to Chevron on the corporate social responsibility actions to take following the findings from the research.The research aims to have defined recommendations for Chevron as to the types of CSR activities that would benefit Chevron and the local communities in the region.
There are different problems and issues explored in this research. One issue is the extent of contribution provided by oil and gas firms to local communities and countries through corporate social responsibility activities. This is explored in the study to gain an understanding of the contribution of oil and gas firms in general and Chevron, as the case study firm, in particular on the social and economic development of local communities in the Niger Delta region. Another issue is the impact of these corporate social responsibility initiatives of the oil and gas firms. Given the significant value extracted by the oil and gas firms from the use of the oil and gas resources of the local communities and countries such as Nigeria, this issue needs to be explored to determine if the oil and gas firms are contributing a proportionate size of benefits to the local communities which are considerably impacted by the activities of the oil and gas firms.
CHAPTER TWO
LITERATURE REVIEW
Conceptual Review
Concept of Oil and Gas industry
Natural gas is made up of just two elements – carbon and hydrogen. It is part of a family of chemicals known as hydrocarbons, which also includes oil and gasoline. As its name suggests, natural gas comes out of the ground as gas oil, gasoline and other hydrocarbons are recovered mixed together in a liquid called crude oil. It is formed as microscopic plants and animals living in the ocean millions of years ago which formed their food in the presence of sun, when died and sunk to the bottom of the sea layer, over millions of year layer after layer of sediment and other plants and bacteria formed. As they became buried ever deeper, heat and pressure began to rise. The amount of pressure and the degree of heat, along with the type of biomass, determined if the material became oil or natural gas. Very high heat or biomass made predominantly of Plant material produced natural gas (Yalaju, 2006).
In Nigeria, oil and gas operations commenced effectively in 1956, with the first commercial quantity found in that year by the then Shell D’Arcy in Olobiri in the Akwa Ibom state. Before this time, from November 1938, almost the entire country was covered by a concession granted to the company to explore petroleum resources and in 1971, Nigeria joined Organization of Petroleum Exporting Countries (OPEC) as a member. This period witnessed the emergence of National Oil Companies (NOCs) across OPEC member countries, with the sole objective of monitoring the stake of the oil‐producing countries in the exploitation of the resource (Labara 2009).
Multinational Oil Companies (MNOCs) were allowed to continue with such operations under Joint Operating Agreements (JOA) which clearly specified the respective stakes of the companies and the Government of Nigeria in the ventures whereas in other OPEC members’ countries, they have direct control of production operations. Currently in Nigeria,(MNOCs) operate under production sharing contracts due to the emergence of offshore oil and gas operation.
This shift is attributable to a number of factors ranging from the complexity of operations in the offshore terrain which regulation under JOA, it will be difficult and also leads to dwindling of resources. Production sharing arrangement is the type of arrangement, in which the oil company will bear the operating cost and after then share the profit with federal government based on Memorandum of Understanding (MOU) after deducting petroleum profit tax (Onduku, 2009).
This period witnessed the arrival of other MNOCs in the sector such as Gulf Oil and Texaco (now ChevronTexaco), Elf Petroleum (now Total), Mobil (now ExxonMobil), and Agip, in addition to Shell, which was already playing a dominant role in the industry. They play major role in the sector with shell accounting for just less than 50% of Nigeria’s total daily production, which currently stands at about 2.4 million barrels of oil.
The oil industry is in charge of exploration, extraction, refining, transporting and marketing petroleum products of which the volume products are fuel oil and gasoline. These products serve as raw material to many chemical products including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry is divided into three major components which are: upstream, mid stream and downstream. Upstream activities are oil company’s activities which takes place in the oil field. This is a situation where oil wells are contracted to drilling contractors and oil companies, which involves discovery, production or extraction of oil and gas and their treatment, transportation and delivery to designated export terminal or processing plants.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
The researcher made use of both primary and secondary source of data collection as the main resources suppliers of the needed data. Much emphasis was placed on the primary sources of data as it enabled the researcher to obtain first hand information from the respondents.
Research Design
In this study, a Cross-sectional Quantitative research design approach was used. The justification for considering this method was the need to accurately appraise the extent to which Oil and Gas companies in the Niger Delta Region of Nigeria fulfil their social Responsibility.
Source of Data
This study used Primary data through questionnaire administration in collecting data in line with the objectives of the study; to examine the extent to which multinational oil companies employ graduates, empower unskilled labour, empower the youth through award of scholarship and assist in community development of their host community.
PRIMARY SOURCES OF DATA
Data from primary sources are originated data from the organization under study.
The data used in thin research are obtained and constructed questionnaires for all cater gores of ……for easy understand and to avoid ambiguous questions. Internees were also used by the researcher in this request for precise and accurate information for data presentation and analysis of testing hypothesis.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
AN OVERVIEW
This chapter is devoted to presentation and analysis of data. The data presented and analyzed here was obtained from primary source through questionnaire simple parentage analysis was used to analyze the responses.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
The researcher after a careful and through presentation analysis, and interpretation of the data collected, the researcher cane up with the following finding that
- The activities of the company cause some negative effect on the environment such as pollution of air, water and land.
- The companies don’t carry out projects that are of benefit to the society.
- Most of their projects are not fully completed to show that the company is not comported citizen that perform their obligation in the environment.
- The company do encounter some hindrances in the program of implanting there projects such as lack of findings to complete them within the recorded time. Also the company has the problem to material procumbent due to the recession in the company.
- The project have added to the standard of wing of the people through provision of social amenities like pipe borne water, good roads and building of schools and medical services
CONCLUSION
Although this work did not cover all the reunification of the topic, it has however, been established that business organization undertake corporate social responsibility, activities. The company will do much more if the problems and hindrances controlling them and militating against their performance of social obligation are solved.
However, it must be noted that the responsibility providing social facilities and amenities is not that of the business enterprises alone government must therefore not relinquish its primary responsibility of providing these social facilities and amenities simply because the business enterprise are there. Both should complement each other’s effort.
Finally, this work does not claim to have concerned all that need to be said on the subject. But it only represents a modest and honest contribution by the researcher to these correct and heated issues of our time. One of the aims of the researcher is to awaken the interest and instigate debate on the subject. Therefore to the extent that some interest and understanding of the subject sharpened by this works. The work is deemed to have achieved its objective and some useful purposes.
LIMITATIONS OF THE STUDY
They were a number of factors that adversely affected this research study and needs to the mentioned for proper assessments of the work done the factors are as follows:-
- TIME:This study was embarked upon and world be completed within a limited time period furthermore, there was competitive demand for this limited time period. The constraining time factor will adversely limit the scope of the study as well as the extent of data collection.
- Finance:Given that the researcher is being sponsored by a singer parent and that the research requires moving from one place to another, limited financial resources will adversely affect this work.
RECOMMENDATION
- The company should control the activities that bring harm to environment/society and the people living in it.
- The company should engage in activities which are to the benefits of society.
- The project of the company should fully completed to prove that the company is a good citizen of the society.
- Some account of fund should be mapped out for projects to avoid problems like lack of funding to complete the projects at the given time.
- The government on its part should make sure that it provides enabling environment for their operations of business organization, so they operate profitably and be able to shoulder corporate social responsibility.
BIBLIOGRAPHY
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- Milton Friedman (1962) Capitalism and Freedom, University of Chicago U.S.A Oxford Publishers.
