Sustainable Development in the Niger Delta: The Role of Multinational Oil Corporations

This paper investigates the extent to which corporate social responsibility (CSR) initiatives of oil companies operating in the Niger Delta area of Nigeria contribute to the development of host communities across the region.

Nigeria Blue and Green Watercolor Raster Map Illustration
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This empirical study of the corporate social responsibility (CSR) initiatives of oil and gas companies in the Niger Delta region of Nigeria uses the mixed-methods approach, which involves the use of qualitative and quantitative methods for data collection and analysis. Using the purposive sampling technique, 113 participants were recruited for the study, including managers, senior and junior employees, community leaders, market women, and youth representatives.

Findings of the study revealed that, through the provision of key infrastructures such as schools, hospitals, and access roads, oil companies contributed significantly to the development of host communities. The majority of the study participants (74%), however, reported that the quality of projects executed by oil companies was usually low and lacking in durability. Also, the majority of the study participants (58%) reported inadequate collaboration between oil companies and members of the host communities on the choice and location of CSR projects.

Based on the findings of this study, therefore, it is recommended that there is a need to ensure international quality standards in the execution of CSR projects within the Niger Delta sphere. This will enhance the public image of oil companies that are usually considered to be corrupt, exploitative, and insensitive to the needs of host communities.

Also, the study recommends the need for greater collaboration between oil companies and their host communities in determining the choice and location for CSR projects. This will help ensure that CSR projects of oil companies align with the needs of host communities.

The study had become particularly necessary in view of the continuing developmental challenges facing the Niger Delta region in the face of the vast oil and gas wealth. Presently, crude oil is Nigeria’s major source of foreign exchange earnings; it accounts for an overwhelming majority of the country’s income. As such, the oil and gas sector is crucial to the Nigerian economy, which is why the operations and activities of oil and gas companies have been a focal point for political leaders and policymakers, as well as public affairs analysts.

Another aspect of Nigeria’s oil and gas industry that also has received widespread attention is the effect of oil production activities on oil-bearing communities. This emanates from the recurrent issues of oil spillage, which often results in irreversible damages to farmlands and aquatic lives; farming and fishing are the primary occupations for people living in most of Nigeria’s oil-bearing communities.

The term Niger Delta is used to refer to those communities inhabiting the geographical area where the Niger River flows into the Atlantic. The region is said to be occupied by more than 20 million people who live in more than 13,000 distinct sociopolitical settlements. The region is especially significant to the Nigerian nation because it is geographically at the point where multiple bodies of water empty into the Atlantic. Also, the region is host to Africa’s largest wetland, and the third largest in the world. More importantly, the Niger Delta region is endowed with abundant natural resources and contributes about 95% of Nigeria’s total foreign exchange earnings and 80% of the country’s total annual revenue. This is mostly drawn from the region’s mineral resource endowments, which are estimated to be about 93 Tcf of natural gas and 34 billion bbl of crude oil.

Despite the abundance of oil and gas in the Niger Delta, the region continues to be known for persistent widespread poverty as well as a prevailing unavailability of basic infrastructural amenities. This is coupled with an unfriendly terrain that is characterized by sandy, coastal ridge barriers; brackish or saline mangrove fresh water; and permanent seasonal swampy forest. The social systems are equally intricate, consisting of 26 language groups in addition to several large urban areas. Poverty and underdevelopment in the Niger Delta region often are associated with widespread unemployment and deprivation, which continues to resonate in the demands of the people to governmental and nongovernmental bodies.

This paper investigates the effectiveness of CSR initiatives of oil and gas companies on community development across the Niger Delta region.

SPE members can download the complete paper from SPE’s Health, Safety, Environment, and Sustainability Technical Discipline page for free from 21 December to 3 January.

Find paper SPE 211969 on OnePetro here.