The impact of oil pipeline vandalization on the oil industry : a case study of Shell Petroleum Development in Nigeria

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Authors
Amorighoye, Oritsebemigho
Issue Date
2008
Degree
MSc in International Business
Publisher
Dublin Business School
Rights
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Abstract
Nigeria is the sixth largest exporter of oil in the world, with a quarter of its production coming from the Niger Delta area of the country. Despite its riches, the per capita income of Niger Delta people is less than one US Dollar a day. The Niger Delta environment is in a despicable condition, without good roads, portable pipe borne water and a steady power supply. It is this wilful neglect that has created a group cohort of aggrieved citizens who unleash their anger on the oil pipeline. This research paper examines the cause of the damage to the Oil pipelines, the effect of Oil Pipeline Vandalisation on the Oil Industry using Shell Petroleum Development Company as a case study and the social implications on the populace. Data collection, through questionnaire and interview, was used in our analysis. We found that the cause of wilful damage on the oil pipelines is due to official mismanagement of resources and the inability of the Nigerian government to provide employment and basic social amenities to the aggrieved people of the Niger Delta. It is also our finding that Vandalisation has a very high impact on the Oil Industry in Nigeria particularly on Shell Petroleum Development Company, which has affected the oil production capacity of Nigeria and the world economy. Oil spillage has led to environmental degradation and our research has found that this has created socio-cultural problems such as poverty, increase in crime rate and insecurity within the region, and Shell Petroleum Development Company and the government have failed in their corporate social responsibilities as they have done little to alleviate this problem. The importance of this study is in its identifying the key factors to finding a lasting solution to Oil Pipeline Vandalisation in the Niger Delta. It also establishes that the Oil companies and the government should collaborate to provide basic infrastructural amenities to the people of the Niger delta.