MODELLING OF OIL AND GAS MANAGEMENT AND OPERATIONS IN NIGER DELTA REGION; A CASE STUDY OF NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC
ABSTRACT
The problem of the Niger Delta region remains unsolved, after so many years of oil and gas
exploration and production. It seems that these problems cannot be solved, since demands cannot be
met based on the approaches adopted by Government in addressing the issues or demands/needs of the
region. Federal Government have made several efforts to address these problems in the region, those
efforts have proven unsuccessful, more especially on a long-run. Indicating that the issues of the region
have not being confronted as it directly affects the people. Hence a wrong methodology or approach
has being used in addressing the issues of the region which cannot provide permanent solution. This
research work is on modelling of oil and gas management and operations in Niger Delta (a case study
of NNPC). It analyses the relationship between NNPC (Government) and Host Communities (Oil
producing areas of Niger Delta region), using developed models (M1, M2 & M3) to quantitatively
arrived at its parameters. It looks at the demands of the region and how efficiently NNPC have
manage their resources (oil & gas) to meet those needs/demands, which is a basic concept of
management (using available scarce resources to meet needs). And the reasons for continue conflicts
and agitations (unrest) in the region, and as well as the type of relationship existing with Government
(G) and the Niger Delta (N); the stages and degree of conflict escalation in the region and other
relevant case studies (Ken Saro Wiwa & Shell on Ogoniland). The main component of the developed
model 2 (M2) is to address the concept of management (using the available scarce resources to meet the
needs/demands of the people). Therefore for effective and efficient utilization of resources in the region,
needs/demands must be met. Hence Resources (R) available must be directly proportional to demands
(d) which is equivalent to Resources Control (RC). But in the case where Resources available is
inversely proportional to demands of the people agitations will continue, until a point where resources
directly proportional equals to resources inversely proportional known as Equity Share (50%
derivation). Mathematically represented as R = Ed (Equivalent to resources control), R = E/d
(agitations continues) and Ed = E/d (Equity share). Where E = constant (E ≤ 100%). Therefore the
analysis of the model (M2), the results shows that the actual demand (dA) of Niger Delta region is
98.3% (oil derivation) of its total resources produced with a leftover of 1.7% (tax allowance) and tax rate
of 17.93%. It is an indication of the demand for resources control (RC) and fiscal federalism at a tax rate
of 17.3% to be paid to Federal Government. But Niger Delta States gets 13% (oil derivation) while
Federal Government (G) gets 87% of the total resources (oil and gas) produced in the region. Therefore
it indicates that R = E/d; hence agitations will continue in the region. And the rate of deviation
(between RG and RN) is 74%, and the rate at which resources has being diverted in the region is 64.4%.
The analysis of the human relation, model 1 (M1), indicate that there is a poor mutual relationship
between G and N. With 13% zone of shared power (PS) and 87% of zone of unshared power (RO), and
the strength of the shared power is at a ratio of 11% : 2% (G:N). Where the point of intercept is 39%
and the resistive intercept which oppose the mutual relationship is at 61%, indicating too many
personal interests in the kind of relationship that should exist between G and N. From the analysis of
model 3 (M3) and the conflict escalation chart the degree of conflict escalation (CE) is +266.40
NNPC/OC HC/NNPC/En/OC. This means that the conflict lies on the third quadrant, and
therefore could be trace to NNPC/OC as the major cause and mostly affected if there is violence, and
resolution lies primarily on HC/NNPC/En/OC.
Keywords: Oil and Gas Management, NNPC, Niger Delta Region, Models
