The Joint Venture Relationship Between Chevron Nigeria Limited And Nigerian National Petroleum Corporation

Nigeria, with a population of 190,584,690 people is the most populous country in West Africa. Marked with huge reserves of oil and natural gas, oil exploration in Nigeria first began in the year 1908, with long breaks during the first and Second World War. After the further discovery of commercial oil fields in Oloibiri in 1956, crude oil has since being produced in large quantities. Today, the country produces a maximum capacity of 2.5 million barrels of crude oil per day, and is the world’s sixth largest producer of crude oil. Crude oil export, accounts for 90% of Nigeria’s earnings. Oil exploration occurs onshore, on land and swamps, while off-shore operations occur mainly in water depths reaching 2500m. Currently, crude oil is

The Nigerian economy has several activities sectors which include agriculture (crops), livestock, forestry, fishing, manufacturing, crude petroleum mining and quarrying, utilities, building and construction, transport, communication, wholesale and retail trades, hotels and restaurants, finance and insurance, real estate and business services, housing, producers of government services and community, social and personal services. However, with the advent of the crude petroleum sector and its attendant boom in the international market, all other sectors of the Nigerian economy have experienced serious neglect by the government, thus resulting to an unbalanced economy.

Petroecuador and Sinopec agreed to create a Joint Venture that was supposed to be a big opportunity for both, the Latin American and the Asian country. These two companies are different in many ways, especially in the size of their profitability and technology development.

The purpose of this paper is to critically analyze the case “Shell Oil in Nigeria” presented in our text book “Business and Society”. Here we discuss the company’s mission statement, their crisis in Nigeria, and the resulting outcome of their actions. Further we make some recommendations for future actions that may help Shell’s alleviate their crisis in Nigeria.

This paper will discuss the Oil conflict that is occurring in Nigeria. Discussed will be the types of power that the two feuding parties are using and whether their strategies have been effective as well as the influence they have had on the conflict. The contrasting cultural differences and similarities will be discussed as well. The conflict in Nigeria has turned deadly and a successful communication environment must be developed in order to restore peace to the region.

The diversity of the country’s export base has been eroded by focus on hydrocarbon activities, however limited growth in the non-oil sector has helped diversify the economy during the past decade. Agriculture remains relevant as main source of employment. In the 1990’s, uncontrolled debt levels, debt restructuring, failure to meet payment deadlines and write-offs damaged Nigeria’s a reputation. Nigeria returned to civilian rule in 1999, after independence from Great Britain in 1960 was followed by years of military rule. (Nigerian Government, 2015).

It is estimated that more than 2 million barrels of oil a day are extracted in the Niger delta, making Nigeria the biggest West Africa’s producer of petroleum. Its first operations begun in 1950s and were carried out by multinational corporations. The biggest gas flaring company was Shell Petroleum Development company of Nigeria Ltd, of which many of its shareholders were the Royal Dutch from Britain. Despite of legal regulation

Nigeria is blessed with vast quantity of oil making it the 6th largest oil exporter in the organization of petroleum exporting country. Oil is a major source of energy in Nigeria and the world in general. Oil being the mainstay of the Nigerian economy plays a vital role in shaping the economic and political destiny of the country. Although Nigeria’s oil industry was founded at the

Economy of many nations is currently at distress due to current plunge of oil price the international market. This sink in crude oil price produces an economic shock especially to the poor and developing Countries that depend on crude oil revenues to balance their budgets (Iwayemi, & Fowowe, 2011; also see Effiong, 2014). Nigeria, being one of those nations, is currently experiencing economic crisis. For instance, many states in the federation presently can no longer pay their employees’ salaries or provide basic services to their citizens. They are borrowing money or requesting for bailout from the Federal government to fulfill their obligations to their people. The shocking effects of this oil price drop extended

The production and export data for this work was retrieved from the Nigerian National Petroleum Corporation (NNPC) database, the regulating body for the Oil and Gas industry, beginning from Q1, 2005, to Q4, 2013. I also collected crude oil prices from the British Petroleum website. Although the Amnesty Program led to a significant increase in oil production, it does not necessarily suggest it is the best policy that could have been adopted due to its challenges. Introduction The Niger Delta region, the Nigeria crude oil base, had witnessed numerous protests at various times by its citizens over resource wealth and control.

Nigeria is the largest oil producer in Africa, and currently its most populous country. After the oil discovery in the Niger Delta area of Oloibiri in 1956, the country has had oil has its main income producer. Before this, agriculture had the center stage; it accounted for 50% of revenue. Most of the oil exploration is done in the Niger Delta;a region that’s made up of nine states which includes; River, Cross River, AkwaIbom, Delta, Edo, Bayelsa, Imo, Abia, and Ondo. This region has an estimated population of 28 million, amounting to16.7% of Nigeria population (Emmanuel, 2004). It has however suffered the environmental impact of oil exploration with its attendant environmental degradation for years. Unfortunately, the influx of oil companies and the heightening of their operations in Niger Delta are not matched with an agenda for the development of Nigeria in general and Niger Delta in particular. The oil companies claim to have executed several projects in the host communities as part of their Corporate Social Responsibility. The claims include: construction of hospitals, roads and schools, provision of portable water, electricity, sponsorship, scholarships, and; supporting health campaign programmes among others. However, the host communities in Niger Delta seem not to have acknowledged these acclaimed community development projects by oil companies as they continue in their hostile disposition to the companies. According to Omole (2000), the relationship of

Nigerian National Petroleum Company is mainly responsible for the context of firm strategy and rivalry of the oil industry in Nigeria. The increase in the oil reserves and gas utilization is also achievable due to the introduction of various incentives by the government which includes a Memorandum of Understanding that will guarantee a profit margin of 2 US dollar per barrel. This had allowed an increase in

In order to fully understand the mechanics of the clientalistic Nigerian oil governeance, one must first explore the structuring of the institutions tasked with overseeing the industry. First and foremost is the Nigerian National Petroleum Corporation, or the NNPC. The NNPC is the parent company comprised of itself and 12 wholly owned subsidiaries that range from oil trade companies to petrochemical plants. With a workforce of over 9000, the NNPC oversees operation both down and upstream on the Niger river. The NNPC controls such a large percent through its subsidiary the National Petroleum Investment Management Services (NAPIMS), an investment firm that acts as the concessionaire for the NNPC, brokering all the oil contracts on the behalf of the Nigerian government. Utilizing its incredibly high amount of government mandate in conjunction with its industry savvy personnel, the NNPC has postured itself as the leading influence over the Nigerian oil sector. Second in the pecking order is the minister of Petroleum, the official tasked with overseeing the NNPC. A position now (and much of history prior to 1999) held by the Nigerian president, the minister forms a tightly knit cabinet of advisors whose will governs the majority of oil-sector policy making. However, the position has lent itself to corruption, instilling concentrated amounts of power in an institution with

In this section we would look at the Royal Dutch Shell Oil company operations worldwide and in particular the Nigeria operations from several different angles. We will look at how Shell Nigeria operations can impact upon the three stakeholders; The CEO of Shell, an investor and a local Shell employee. Then we would look at this wicked problem with the oil spill in the Niger delta.

Prior to exploring and exploiting hydrocarbons, multinationals and host governments engage in contractual agreements to ensure process is facilitated smoothly. All relevant information are captured in the agreement such as length and parties to the agreement, party’s interest, the works scope, control cost and liabilities, transfer interest, allocation of hydrocarbon, accounting procedures just to mention a few. According to Al-Attar A. and Alomair O. (2005), the upstream petroleum arrangements have undergone three evolutions namely the concessionary agreements (CAs), economic nationalism and the current participation agreements (PAs)