Nigerian Oil Research Articles

Conflict Resolution in the Nigerian Oil and Gas Construction Industry

Purpose: The high incidence of conflicts within this sector has significant ramifications, such as project delays, exceeding budgeted costs, and project abandonment (Oyewunmi et al., 2018). Cultural and linguistic disparities, inadequate communication, and competing interests among stakeholders are some of the causes of these conflicts. These conflicts are made worse by the intricate contractual arrangements, weak conflict resolution procedures, and weak regulatory frameworks that characterize the sector. Even though Nigeria's economy greatly benefits from the oil and gas sector, the frequency of conflicts impedes the sector's expansion and stability. Materials and Methodology: The methodology adopted is by secondary data which entails the examination of pre-existing data from many sources, including academic journals, industry reports, and government papers. The quality of the secondary data used in these studies depended on the reliability and validity of the sources, the methodology used in data collection, and the rigor of the analysis. Findings: The ecological consequences of oil production are a significant cause for conflict in the Nigerian Oil and Gas Construction sector. It is critical for all parties involved to collaborate to reduce this impact and ensure the industry's long-term viability. Regional interests frequently influence the oil sector, particularly in areas with abundant oil resources. These interests may occasionally result in confrontations with other parties. Implications to Theory, Practice and Policy: The research recommends that fairness and equity should be the watchword in distribution of the gains and pains of the economy so that no regions of the country will feel cheated. There should be transparent allocation of proceeds. The active participation of young individuals in the Niger Delta region in the formulation of policies that will directly impact their welfare is crucial and should be adopted.

Environmental Cost Disclosure and Financial Performance of Oil and Gas Firms

General Background: The relationship between environmental cost disclosure and financial performance is essential in environmentally impactful sectors like oil and gas. Specific Background: This study focuses on listed oil and gas firms in Nigeria, examining health and safety costs and waste management costs as predictors of return on assets (ROA). Knowledge Gap: Existing research shows inconsistent findings on the effects of environmental disclosures on financial performance, necessitating further investigation. Aims: This study aims to clarify the impact of environmental cost disclosures on financial performance, particularly through health and safety and waste management costs. Results: Using ex-post-facto research design and secondary data analysis, the findings reveal a significant positive relationship between environmental cost disclosures and financial performance, highlighting the importance of these costs on ROA. Novelty: By applying legitimacy theory and focusing on specific environmental costs, this research fills a gap in Nigerian literature. Implications: The study recommends enhanced environmental policies for oil and gas firms, promoting accountability and aligning financial performance with ecological responsibilities. Highlights: Significant positive relationship exists between environmental cost disclosures and financial performance (ROA) in Nigerian oil and gas firms. Health and safety costs and waste management costs are critical predictors of financial performance. The study emphasizes the need for enhanced environmental policies and corporate accountability in the oil and gas sector. Keywords: Health, Safety Cost, Waste Management Cost, ROA

Optimizing wind power integration for enhanced efficiency in the Nigerian oil and gas sector: Exploring novel applications beyond existing research.

Optimizing wind power integration for enhanced efficiency in the Nigerian oil and gas sector: Exploring novel applications beyond existing research.

A legal and regulatory compliance framework for maritime operations in Nigerian oil companies

The maritime sector plays a critical role in Nigeria's oil industry, serving as the primary conduit for offshore oil exploration, production, and transportation. As the country remains heavily reliant on its oil revenues, ensuring that maritime operations comply with legal and regulatory standards is crucial for operational safety, environmental sustainability, and economic stability. This review outlines a comprehensive legal and regulatory compliance framework for maritime operations in Nigerian oil companies, focusing on the roles of key regulatory bodies such as the Department of Petroleum Resources (DPR), the Nigerian Maritime Administration and Safety Agency (NIMASA), and the National Environmental Standards and Regulations Enforcement Agency (NESREA). It explores major laws such as the Coastal and Inland Shipping (Cabotage) Act, Petroleum Industry Act (PIA), and Environmental Impact Assessment (EIA) Act, highlighting their implications for offshore drilling, oil transportation, and environmental protection. Additionally, the review discusses the compliance challenges Nigerian oil companies face, including environmental risks, maritime security threats, jurisdictional conflicts, and the technical demands of adhering to safety standards. To address these challenges, the study emphasizes the need for regular audits, technology integration, capacity building, and collaborative engagements between oil companies and regulatory authorities. Through case studies on oil spill response and the enforcement of cabotage laws, the review underscores the importance of robust regulatory enforcement to ensure safety, mitigate environmental damage, and enhance operational efficiency. This framework is essential for the future growth of Nigeria’s oil sector, balancing economic gains with legal compliance and sustainability in maritime operations.

Modeling and Forecasting Crude Oil Prices in Nigeria Using ARIMA: A Time Series Analysis from 2013-2022

Study’s Excerpt/Novelty This study employs the Box-Jenkins ARIMA model to forecast crude oil prices in Nigeria from 2013 to 2022, identifying the ARIMA (1, 1, 1) model as the most suitable based on AIC, BIC, and HQIC criteria. The findings emphasize the model’s adequacy for short-term price forecasting but highlight its limitations, particularly its sensitivity to non-stationary data. The study recommends incorporating macroeconomic variables or hybrid models for more accurate long-term predictions, while urging Nigerian oil sector stakeholders to explore alternatives like Liquefied Natural Gas (LNG) to mitigate revenue losses from declining crude oil sales. Full Abstract This study utilizes Box-Jenkins ARIMA modeling to forecast crude oil prices in Nigeria from 2013 to 2022. The data, sourced from the CBN statistical bulletin, revealed non-stationarity, corrected by first differencing. The ARIMA (1, 1, 1) model was identified as the most suitable based on AIC, BIC, and HQIC criteria, providing significant information on short-term price forecasting and model adequacy. The study concludes that while ARIMA models are effective for short-term forecasting, their limitations, such as sensitivity to non-stationary data, suggest that future research should incorporate macroeconomic variables or hybrid models for improved accuracy. It was recommended that stakeholders in the Nigerian oil sector should explore other avenues in the sector, such as Liquefied Natural Gas(LNG), in order to absorb the decrease in revenue as a result of the decline in revenue from crude oil prices and sales.

Influence of Board Characteristics on Carbon Emission Disclosure: Evidence from the Nigerian Oil and Gas Sector

This study investigates whether board characteristics influence a firm’s carbon emission disclosure, in the context of the Nigerian listed oil and gas companies. Board characteristics is divided into board composition (board size, board independence and board structure) and board diversity (board gender diversity, ethnicity and background). The study assessed data from 22 quoted oil and gas companies for the fifteen-year period (2009-2023). The study adopted ordered regression for data analysis and concludes that board structure, board independence, board gender diversity and board ethnicity significantly influence the likelihood of high-quality carbon emission disclosure. The findings established the significant roles of the board in allocating resources to environmentally friendly activities, monitoring managerial activities, and ensuring that firms meet its obligation to operate in a climate friendly manner.

Statistical Estimation and Inference of Board Composition on Financial Performance of Oil and Gas Companies in Nigeria

This study examines the relationship between board characteristics and financial performance of listed oil and gas firms in Nigeria, highlighting the gap in existing literature on the topic. The purpose of this study is to investigate the impact of board independence, board size, and gender diversity on financial performance. A sample of three listed oil and gas firms on the Nigerian Exchange Group (NGX) was selected, and secondary data from annual financial statements for 2010-2021 were analyzed using panel regression and correlation analysis. The findings reveal that female board members have a positive and significant impact on financial performance, while board independence and board size have a positive but insignificant impact. The study concludes that gender diversity on boards is a key factor in driving financial success, and recommends increasing the number of female board members to improve financial performance. The results contribute to the understanding of the relationship between board characteristics and financial performance in the Nigerian oil and gas industry.

EXPLORING THE NEW GREEN GOVERNANCE FRAMEWORK ON ENERGY COMPANIES' FINANCIAL PERFORMANCE: A PILOT STUDY

The COP26 framework focuses on energy transformation and green governance (GG) as its central priorities. This paper critically evaluated the examination of green governance in the context of Nigerian oil and gas companies, exploring its implications on financial performance (FP) measures. Recent years have presented significant hurdles for companies in the energy sector because of the high expense of ecological remediation following spills and the use of conventional systems of operation. The study collected primary data using a well-structured questionnaire. The researchers employed a systematic approach to select fifteen (15) oil and gas companies for inquiry, utilizing a rigorous random sampling method. Subsequently, three executives from the management, accounting, and auditing departments participated based on predetermined criteria. Utilizing direct linear regression analysis, the study explored the relationship between GG and FP. "The regression analysis showed a coefficient for green governance (GG) of 0.391 with p = 0.004."), signifying a statistically significant correlation. The correlation coefficient (R = 0.413) suggests a substantive association between GG and FP, with 17% of FP variance explained by GG (R2 = 0.170). Hypothesis testing via the F-test demonstrates a positive, significant relationship (F = 9.236, p < 0.001) between GG and FP, this suggests that there is a strong and meaningful correlation between GG and FP. The findings of this research can provide significant direction for policymakers in developing relevant legislation, at the same time, industry practitioners can leverage these findings to optimize their operational strategies and augment their organizations' financial performance.

Do board characteristics matter in the relationship between intellectual capital efficiency and firm value? Evidence from the Nigerian oil and gas downstream sector

PurposeThe purpose of this study is to investigate the moderating effects of board characteristics such as board size, chief executive officer duality, number of board meetings, and diversity, on the relationship between intellectual capital efficiency and firm value in the Nigerian oil and gas downstream sector.Design/methodology/approachWe collected time-series cross-sectional data from eight (8) downstream-sector oil and gas companies quoted on the Nigerian Exchange Group for the period 2004–2020. We analysed the data using Prais–Winsten regression with panel-corrected standard errors.FindingsOverall, our results show no significant direct relationship between the modified value-added intellectual coefficient and our two measures of firm value (Tobin’s Q and Price Earnings Ratio (PER)). However, the board size is found to moderate the intellectual capital efficiency–PER relationship significantly and negatively, whereas board diversity significantly positively moderates the association between the modified value-added intellectual coefficient and PER. Our multi-theory framework, which blends clean surplus, agency, stakeholder, and resource-based theories is found to be relevant in underpinning this study.Research limitations/implicationsThe research relies on 17-year panel data for eight downstream-sector oil and gas companies. Consequently, future research within intellectual capital efficiency in Nigeria could incorporate related sectors like midstream and upstream to enable comparability and expand generalization.Practical implicationPolicymakers may adopt the study findings to serve as a robust empirical base to demand improved board diversity as a catalyst for boosting the potency of the intellectual capital efficiency-firm value relationship.Originality/valueFirstly, to the best of our knowledge, this study is the pioneer attempt to use board characteristics as moderators of the relationship between intellectual capital efficiency and firm value. Secondly, we develop and use a novel theoretical framework that combines clean surplus, agency, stakeholder, and resource-based theories to underpin the study.

Government-Imposed Taxes and Firms’ Profitability: Evidence from Nigerian Oil and Gas Companies

Government-Imposed Taxes and Firms’ Profitability: Evidence from Nigerian Oil and Gas Companies

DEA-driven risk management framework for oil supply chains

This paper develops a comprehensive risk management framework to optimise the Nigerian oil supply chain risk mitigation strategies. Given the complexities of the oil supply chain, this framework aids researchers and decision-makers in navigating innovative risk management approaches and considering the implementation of associated challenges. Data Envelopment Analysis (DEA) is initially employed to prioritise risk factors, and based on obtained results, optimal response strategies are determined. The study's findings reveal that criminality and terrorist attacks are the paramount Nigerian oil supply chain risk factors. Additionally, the research identifies practical mitigation strategies, such as risk transfer, safety planning, alternative energy carriers, improved energy efficiency, emergency rescue plans, expected shortages, and diplomatic relations. This research contributes valuable insights to both academia and industry, fostering a deeper understanding of risk dynamics in the Nigerian oil sector. The framework presented offers a powerful approach to risk management, providing a foundation for informed decision-making and strategic planning in the ever-evolving landscape of supply chain dynamics.

Enhancing Economic Equity: Unionization's Role in Nigeria's Oil and Gas Workforce

The Nigerian Oil and Gas Industry Content Development Act 2010, aims to promote the patronage of Nigerian products and services by industry operators. The NUPENG and PENGASSAN oil unions in Nigeria have an impact on labour regimes and union power. Local employees in the oil and gas sector are heavily supported by unions. This study investigates the impact of unionization on economic equity within Nigeria's oil and gas workforce. Qualitative research design was adopted. The result of the findings show that Higher Wages and Better Benefits and Improved Working Conditions are among the leading benefits of unionization with mean values of 4.9 and 4.8 respectively. A positive correlation relationship exists between union and wages of labourers/staff, with result of coefficient of determination (R2) given as 0.622983 which implies that 62.37% of the stability of labourers’ wages is explained as a result of union strength. An authoritarian work environment and “Right-to-work” laws are among the barriers of joining unions by staff members of organizations. The research recommends strengthening union capacity, promoting collaboration, policy reforms, and local content in Nigeria's oil and gas industry, improving legislation, supporting SMEs, and promoting transparency and accountability. Keywords: Gas Industry, Industry operators, Oil and Gas workforce, Nigeria Oil, Unionization

Misappropriation in the Nigerian Oil and Gas Sector: Strategies for the Accountant General of the Federation

The study addressed the “Misappropriation in the Nigerian Oil and Gas Sector.” The paper employed a theoretical and content analysis approach, conducting an extensive review of literature from online journals and databases of standard-setting bodies such as the Auditing Standards Board and the Association of Certified Chartered Accountants (ACCA). Drawing from the Fraud Triangle Theory, the paper highlighted the three primary factors-opportunity, pressure, and rationalization-that motivate individuals to engage in fraudulent activities. The findings underscored the role of weak governance structures, political interference, and institutional deficiencies as key drivers of misappropriation and corruption within the Nigerian oil and gas sector. Moreover, the literature reviews revealed strategies to combat corruption, including strengthening regulatory frameworks, leveraging technology, and promoting a culture of integrity and ethical leadership. Effective measures to address misappropriation in the Nigerian oil and gas sector require comprehensive reforms, collaborative efforts between stakeholders, and rigorous enforcement and monitoring of policies. As the Accountant General of the Federation, it is recommended to prioritize accountability, transparency, and good governance through regular independent audits, establishment of a specialized anti-corruption unit, adoption of international accounting standards, implementation of whistleblower protection mechanisms, and ongoing capacity building and training programs for finance professionals and public officials involved in managing finances within the sector.

Corporate governance and financial performance of oil and gas firms: The Nigerian experience

As a result of corporate scandals, governments and corporations around the world enacted a slew of laws and recommendations known as best practices codes. As a result, this study examines the effect of corporate governance on the financial performance of listed Nigerian oil and gas firms from 2012 to 2022. The sample size for the study was set at nine firms. Corporate governance was measured by board size, composition, independence, and audit committee size, while financial performance was measured by Return on Asset (ROA) and Return on Equity (ROE). The hypotheses were tested using fixed effect panel regression, which was informed by the Hausman test. Findings revealed that board size has a significant positive effect on ROA while board size have an insignificant effect on ROE. In addition, board composition has an insignificant effect on both the ROA and ROE. Furthermore, board independence has a significant negative effect on the ROA and ROE. Similarly, the size of the audit committee has a significant negative effect on ROA, while the effect on ROE was negative but insignificant. The study concludes that corporate governance significantly affect financial performance of listed oil and gas firms in Nigeria. The Security and Exchange Commission should ensure that listed oil and gas firms adhere strictly to the required board size since a larger board does not influence financial performance.

Effect of Employee Health and Safety Cost on Profitability of Listed Oil and Gas Companies in Nigeria

The present study employed an ex-post facto research design to investigate the impact of employee health and safety costs on the profitability of oil and gas companies listed on the Nigerian Exchange Group (NXG) in 2023. Utilizing data analysis techniques such as descriptive statistics, Pairwise Granger Causality Tests, Panel unit root tests, and Ordinary Least Squares (OLS) regression analysis through E-view-9 software, the study fills gaps in previous research by focusing specifically on this underexplored aspect of corporate expenditure. Through purposive sampling, the study ensures a comprehensive analysis of companies with up-to-date financial reports, enhancing the reliability and validity of the findings. The study found that there is insufficient evidence to conclude that employee health and safety costs have a significant direct effect on profitability for the listed oil and gas companies in Nigeria within the examined timeframe. By adopting a rigorous research methodology and statistical approach, the study provides valuable insights into the relationship between employee health and safety costs and profitability in the Nigerian oil and gas sector, contributing significantly to the existing literature and advancing understanding in this field. The study further suggested that oil and gas companies should implement proactive safety measures, such as regular training and equipment upgrades, to prevent workplace accidents and reduce associated costs. Also, they should enhance transparency by integrating employee health and safety metrics into sustainability reporting frameworks to build stakeholder trust and accountability.

The Effect of Environmental Taxes on Environmental Accounting Disclosure of Nigerian Oil and Gas Companies

There is currently a lack of information about the contemporary and potential effects of environmental taxes on environmental accounting disclosure. This study, therefore, explores environmental taxes' impact on Nigerian oil and gas companies' disclosure of environmental accounting information. The study used auxiliary data by generating information on the outcome variable and the explanatory variable from the “Organization for Economic Cooperation and Development” (OECD) and annual reports and accounts of the oil and gas corporations in Nigeria. The analysis included thirteen (13) companies as of December 31, 2021. Fixed-effects regression using Estimation using Driscoll and Kraay standard errors (DKSE) has been used in this study. The study revealed that an increase in total green taxes or transportation taxes will stimulate the disclosure of environmental accounting information by the oil and gas corporations in Nigeria. It is also documented that oil and gas companies that have high C2 intensity are less likely to disclose environmental accounting information. The study findings will be useful to the regulators and policymakers in Nigeria. This is because if the government enhances environmental taxes, it may inspire companies to enhance their environmental accounting procedures.

JOINT VENTURE, TECHNOLOGY TRANSFER AND THE PERFORMANCE OF NIGERIAN OIL AND GAS INDUSTRY

Purpose: The objective of this study is to examine joint venture, technology transfer on the performance of Nigeria's oil and gas sector between 1981-2021. Theoretical Framework: It is indisputable that the Nigerian oil and gas sector is not at peak performance when compared to what is obtainable from its peers in the Organization of Petroleum Exporting Countries (OPEC) (Iheukwumere, 2021; OPEC, ASB 2020). One of the factors responsible for the abysmal performance is ineffective and incoherent technology transfer management through joint venture arrangements (Odusina, 2022). Therefore, there is a need to empirically investigate the impact of joint venture arrangements on Nigeria's oil and gas sector production which lacks sufficient research. Methodology: The ex-post facto design was used where data were collected through secondary sources on the aggregate output of the joint venture companies and the total yearly output of the upstream sector of Nigeria’s oil and gas industry represented the performance of the Nigerian oil and gas sector in the period 1980 to 2021. The collected data were analyzed using the Quantile Autoregressive Distributed Lag (QARDL) approach to test for short and long-run impacts. Findings: The study revealed that there is a significant impact of joint venture arrangements on oil and gas production in both the short run and long run. Research, Practical & Social Implication: The study therefore recommends that policymakers and industry stakeholders should carefully evaluate the terms and conditions of joint ventures to ensure their alignment with the goals of maximizing oil and gas production. Originality/Value: The use of joint venture as a proxy for technology transfer in the production of oil and gas in Nigeria and use of secondary data between 1980-2021 for joint ventures is an eye-opener for further exploration of the study areas in oil and gas production management, particularly in the area of technology transfer, which lacks sufficient research.

BOARD CHARACTERISTICS AND CORPORATE PERFORMANCE: EVIDENCE FROM THE NIGERIAN OIL AND GAS COMPANIES

This study investigated how board characteristics such as board size (BOSI), board independence (BOID), board gender diversity (BOGD), and board meeting (BOMT) impact the performance of the Nigerian oil and gas sector. Seven oil and gas firms were randomly selected, and data collected on the relevant variables for ten (10) years. Data were descriptively analysed using mean, standard deviation, skewness, and kurtosis, while a panel data model was used as the estimation technique. The study found that BOSI, BOID, and BOGD positively and significantly impact the performance of oil and gas firms in the country. Though the relationship between BOMT and the performance of oil and gas firms is positive, it was not statistically significant. It is, therefore, concluded that critical attention should be paid to board characteristics as they play critical role in monitoring the company’s management, establishing strategic direction, and protecting the interests of shareholders and stakeholders. This study recommends that oil and gas firms maintain stipulated number of independent directors that could help sustain positive and significant association between board independence and performance of the sector.

Effect of Liquidity Management On the Financial Performance of Nigerian Oil and Gas Firms

The Nigerian Oil and Gas industry, as a result of the COVID-19 pandemic, continues to be plagued with numerous economic challenges that affect its liquidity position and hinders it from delivering on its core mandate of profitability. Hence, the purpose of this research was to look into the effect of liquidity management on the financial performance of Nigerian oil and gas firms. Current Ratio (CUR), Quick Ratio (QUR), Cash Ratio (CAR), and Return on Capital Employed (ROCE) were explored as proxy variables for liquidity management and financial performance, respectively, using an ex-post facto research approach. The study used a purposive sampling approach to collect secondary data, which was based on the availability of data at the time of the investigation. These figures were collected from five Nigerian oil and gas firms' annual financial reports, which spanned the years 2012 through 2021. The data was analyzed using descriptive statistics and regression analysis. Results from the analysis revealed that Quick Ratio and Cash Ratio has a positive insignificant impact on Return on Capital Employed while Current Ratio has a negative significant impact on Return on Capital Employed. Based on the findings, managers of oil and gas firms should adopt effective liquidity management policies that guarantee an optimal level of liquidity that improves its profitability and enables them operate with a reasonable margin of safety.

Mining from the pipeline: Artisanal oil refining as a consequence of failed CSR policies in the Niger Delta

Oil production in the Niger Delta first attained global prominence after the 1995 hangings of Ken Saro-Wiwa and eight other Ogonis. In the face of horrible publicity and credible allegations that international oil companies were complicit in systematic human rights violations against local host communities, corporate social responsibility (CSR) was embraced. CSR in the Nigerian oil industry has evolved from non-existent to limited community development programs to today's Global Memorandum of Understanding model. Yet, concomitant with CSR's growth has been a devastating increase in artisanal oil refining or “bunkering.” In this article, we do not focus on industrial scale bunkering, which clearly requires high-level political support. Instead, we focus on the growth of small-scale artisanal refining in the rural Niger Delta. We situate this sector's growth in failed government and CSR policies, highlight its devastating environmental impacts, and advocate a shift away from flawed and limited CSR to legal and regulated modular refineries that, with fewer negative developmental and environmental externalities, could serve as a vital source of job creation and wealth generation.