The impact of shell petroleum development company on the socio economic development of obelle ibaa community, emohua local government area

THE IMPACT OF SHELL PETROLEUM DEVELOPMENT COMPANY ON THE SOCIO ECONOMIC DEVELOPMENT OF OBELLE IBAA COMMUNITY, EMOHUA LOCAL GOVERNMENT AREA

ABSTRACT

This study examined the impact of shell petroleum development company on the socio economic development of obelle ibaa community, emohua local government area. Four research questions and three null hypotheses were posed for the study. The research design adopted was the survey design. The population of the study comprised of temporary and permanent staff of Shell Petroleum Development Company (SPDC) in A the area. The total sampled size was 731 respondents representing the number of validly filled and returned questionnaires. The instruments used for data collection was a questionnaire. The research questions were analyzed using percentages and mean statistic. T test was utilized in testing the hypotheses at 0.05 level of significance.  Based on the findings the following recommendations were made: Oil companies should recognize their responsibilities, the host communities expectations and develop partnership as preferred model for their community development activities for peaceful co-existence. The oil bearing communities should try as much as possible to be a good host to these oil multinational companies by providing a safe and conflict free environment for them.

 

CHAPTER ONE

 

INTRODUCTION

Background to the Study

The activities of the oil industries in Nigeria is dominated by multinational oil companies such as Shell Petroleum Development Company (SPDC), Chevron, Mobil, Texaco, Elf, Nigeria Agip Oil Company (NAOC), etc. These oil companies operate under a joint venture agreement with the Federal Government, represented by the Nigerian National Petroleum Corporation (NNPC). Shell Petroleum Development Company of Nigeria Limited (SPDC) is the largest oil and gas exploration and production company in Nigeria. It is the operator of a joint venture in which NNPC holds 55% percent shares; Shell 30 percent, Elf 10 percent and Agip 5 percent.

Shell Development Company of Nigeria is prominent in the history of Nigeria’s development since the need to develop the country has over the years been wholly dependent on fund from the oil industry. The oil exploration. The discovery of oil in 1956 in commercial quantity and its subsequent oil boom in 1970’s Nigerians Societies have observed remarkable structural transformation which has resulted to rapid urban development as opposed to environmental degradation of oil bearing communities.

Shell Diary, (1998) shows that SPDC produces almost half of the country’s oil from more than 90 oil fields in the Niger Delta areas. It also supplies 95% of the country’s commercial gas reserves. The scale of SPDC operation is massive, involving an estimated land of 6,200 kilometers of pipeline more than 1000 wells, 87 production stations, 9 gas plant and large terminals at Forcados and Bonny.

Many communities and individuals have spoken against the activities of Shell  in their areas of operation. The assumptions hold that the oil companies in Nigeria are massively exploiting their host communities but giving little or nothing in return to the people.

Prior to 1995, Shell’s CSR strategy in Nigeria focused on risk and reputation management. For the purpose of contributing to socio-economic development of Niger Delta communities, Shell adopted the community assistance (CA) approach to development, which emphasized corporate philanthropy. It was essentially about giving things to the communities. (Ogwuezi 2002).

With its CA approach to development, Shell placed emphasis on “gift” rather than support for economic development programmes. This focused on what Shell felt the communities lacked or on Shell’s perception of poverty within the communities. Ite (2002) posits that as a result, the communities became perceived as helpless victims of circumstances rather than capable actors in the development process. Gradually, the dependence culture became established and the communities saw the development of infrastructure provided as charity and as a form of rent for Shell’s use (and abuse) of the environment and resources. In effect, the community groups were the passive recipients of Shell’s donations. This is typical of the top-down approach to development (development not conceived with the full involvement of the people) which has been found to be largely an ineffective approach to poverty alleviation.

Statement of the Problem

Rivers State is one of the major oil producing state in Nigeria. This makes the state a significant contributor to the country’s national income. However, her contribution to the national economy has not translated to corresponding physical and human development in the state, despite the fact that the people and their communities suffer and make lot of compromises for the land to produce crude oil that Nigeria depends upon for significant percentage of the national income. Often the people of the oil rich state complaint of deprivation, marginalization, environmental pollution and general neglect by both the government and the multinational oil companies involved in the exploration and exploitation in their communities.

Armanyie (2001) posits that this area that contributes the largest chunk of the country’s revenue has remained the most neglected and impoverish in Nigeria. Inspite of the huge contribution of the region to the nation’s economy, the inhabitants continue to live in abject poverty, suffers both ecological and environmental degradation, and remain grossly underdeveloped, lacking the most basic amenities that make life worth of living such as good drinkable water, good roads, electricity, manpower development, good health service etc.

The continued neglect and low development level of physical and human resources especially the lack of basic social amenities in almost all the oil producing communities have led to series of violent and conflicts between the indigenes of the state and the multination companies. To ensure rapid development of the oil producing communities and to make the multinational companies partake meaningfully in the development process of their host communities, the principle of Corporate Social Responsibility (CSR) was introduced. This principle of CSR imposes some responsibilities that would make the companies return some of their profits to the communities in term of physical and human development. This study therefore examines the The impact of shell petroleum development company on the socio economic development of obelle ibaa community, emohua local government area

 

Purpose of the Study

The general purpose of this study is to examine the The impact of shell petroleum development company on the socio economic development of obelle ibaa community, emohua local government area. Specifically the study aims:

1. to examine the role of Shell Petroleum Development Company (SPDC) in promoting economic development in its host communities .
2. to examine the extent to which SPDC promoting sustainable community development in their host communities .
3. to examine the extent to which SPDC have help to mitigate environmental degradation of oil producing communities .
4. to examine the extent to which of SPDC have influenced the socio-economic life of the host communities .

 

Significance of the Study

This study is of great significance to the oil bearing communities, as its findings and recommendations will strengthen community development programmes of oil companies in meeting the developmental priorities of the host communities.

The findings of the study is significant in that it will make the multinational oil companies identify practices to promote for sustainable community development and give recommendations on the way forward to establish cordial relationship between them and their host communities, since CSR is more of management of relationship.

The findings of the study will help to identify those policy reforms including laws that excluded communities from participating in their developmental processes and make necessary recommendation that will correct these policy measures.

Finally, the findings of the study will add to the body of knowledge to community Development in Adult Education, since it deals on corporate social responsibility in relation to sustainable community development. Such knowledge will be very useful to guide future research on similar issues in the research area.

Research Questions

The following research questions were posed to guide the study.

1. What are the role of SPDC in promoting economic development in their host communities ?
2. To what extent have SPDC helped to promote sustainable community development ?
3. To what extent have SPDC helped to mitigate environmental degradation in the host communities ?
4. To what extent have SPDC influenced the socio economic life of the host communities ?

 

Hypothesis of the Study

The following hypotheses which were tested at 0.05 level of significance guide this study;

1. There is no significant difference in the mean ratings of respondents on the role of SPDC in promotingsustainable community development in their host communities .

Scope of the Studies

This study covers the activities of multinational oil companies . With particular interest on the activities of Shell Petroleum Development Company  in  Obelle Iba Community, Emouha LGA, Rivers State. The operations of SPDC were investigated in terms of their contributions to socio economic development of their host communities .

THE IMPACT OF SHELL PETROLEUM DEVELOPMENT COMPANY ON THE SOCIO ECONOMIC DEVELOPMENT OF OBELLE IBAA COMMUNITY, EMOHUA LOCAL GOVERNMENT AREA

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