Analysis of Crude Oil Production in Nigeria by Servicing Companies

doi:10.7176/jetp/12-1-02

Abstract

The petroleum industry in Nigeria has brought unprecedented changes to the Nigerian economy, particularly in the past five decades when it replaced agriculture as the cornerstone of the Nigeria economy. The oil industry has risen to the commanding heights of the Nigerian economy, contributing the lion share to gross domestic product and accounting for the bulk of federal government revenue and foreign exchange earnings since early 1970. However, Nigeria’s considerable endowment in fossil fuel has not translated into an enviable economic performance; rather, the nation’s mono-cultural has assumed a precarious dimension in the past decades susceptible to the vagaries of the international oil markets. Empirical analysis was conducted by applying the Multiple Linear Regression of the Ordinary least square techniques, the joint distribution of independent variable contribute to the success of the total production prob(F. Statistic) = 0.00122 which is less than 0.05 thereby establishing the significance of the independent variable. Conclusively, the Servicing Company relationship is not the same, also from estimated regression line only x 2 (Joint Ventures AF/CARRY and x 5 (Sole Risk Independent Companies) has the highest coefficient which implies that they have greater contribution to the total production. Keywords: Crude Oil, Foreign Exchange Earnings, Multiple Linear Regression, Servicing Company, Total Production. DOI: 10.7176/JETP/12-1-02 Publication date: January 31 st 2022

Highlights

Oil is a major source of energy in Nigeria and the world in general
Large proceeds are obtained from the domestic sales and export of petroleum products, its effect on the growth of the Nigerian economy as regards returns and productivity is still questionable, the need to evaluate the relative impacts of crude oil on the economy
It is apparent from the empirical analysis in chapter four that fitting econometric model is appropriate in establishing the functional relationship that exists between the total production of crude oil and the explanatory variables

Summary

INTRODUCTION

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. While the discovery of oil in the eastern and mid-western regions of the Niger Delta pleased hopeful Nigerians, giving them an early indication soon after independent economic development was within reach, at the same time it signaled a danger of grave consequence: oil revenues fueled already existing ethnic and political tension and "burned" the country. This tension reached its peak with the civil war that lasted from 1967 to 1970. Crude oil consumption is a function of four explanatory variables real oil price, real GDP per capital, oil consumption lagged one year and a time trend represent Technological improvements

METHODOLOGY

DATA ANALYSIS

CONCLUSION

Findings

C X1 X2 X3 X4 X5