Operational Excellence, Regulatory Framework and Firm Characteristics in Oil Sector: the Role of Enterprise Risk Management Implementation

Abstract

The evolving challenges of health, safety and the environment (HSE), refineries and high cost of production affects the operations of the Nigerian oil and gas sector. The situation could affect the sector's competitiveness in the international oil market. This article is aimed at determining the role of enterprise risk management (ERM) implementation on the relationship between operational excellence (OpEx), regulatory framework and firm characteristics. A quantitative survey method was employed, data were collected via questionnaires from seven subsidiary companies of the Nigeria National Petroleum Corporation (NNPC), and SPSS was used for the analysis. The findings indicated that regulatory framework and firm characteristics have significant positive effects on OpEx. Also, the ERM implementation significantly influences the relationship between the variables of the study. The paper concludes that the significant variance in OpEx could improve operational performance in the sector. It was recommended that regulations governing the oil sector be reviewed and harmonised.