THE IMPACT OF EMOTIONAL INTELLIGENCE ON THE PRODUCTIVITY OF PETROLEUM FIRMS IN NIGERIA

ABSTRACT

This study is on the “Impact of Emotional Intelligence on the Productivity of Petroleum Firms in Nigeria”. Specifically, the study sought to pursue the following objectives, to: (1) determine how Emotional Intelligence influences employees’ behaviour at work, (2) determine the extent to which Emotional Intelligence affects organizational productivity, (3)  identify the  importance  of  Emotional  Intelligence  interpersonal  competencies  on organizational resource acquisition and (4) ascertain the nature of relationship between Emotional Intelligence social skills competency and strategic constituencies satisfaction. In line with the above objectives, four hypotheses were formulated to act as guide to the study.  The  four  hypotheses  were  tested  at  5%  level  of  significance.  The  Linear Regression was used for hypotheses 1 and 2, Chi-square for hypothesis 3 and Pearson’s Product Moment Correlation Coefficient for hypothesis 4. A computer aided SPSS was used  to  aid  the  analyses.  The  study  was  carried  out  using  inductive  design.  The population of the study is 11,600, with a sample size of 637 determined using the Freund and Williams’ Method. The Simple Random Sampling (SRS) technique was used to determine the sample points. The sample size was distributed in line with the Zigmund method. Data were generated using both primary and secondary sources.  Data were presented in tables and analysed using sample mean and sample standard deviation. From the analyses, it was discovered that Emotional Intelligence influences employees’ behaviour at work positively, affected organizational productivity positively, influences harmonious organizational resource acquisition and has a very positive relationship with strategic  constituencies  satisfaction.  From  the  foregoing,  therefore,  recommendations were made among which include that; (1) Managers of the Petroleum firms in Nigeria should develop transformational leadership among their workforce. (2) Managers should create effective relationship management. (3) Managers should endeavour to develop interdependence among their organizational teams, front line managers and individuals. (4) Managers should always act as catalysts to their workforce.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

The History of Emotional Intelligence started about 2,000 years ago when Plato wrote, “All learning has an emotional base”, (Freedman, 2010). Since then, scientists, educators and philosophers have worked to prove or disprove the importance of feelings. Unfortunately, for a large part of those 2000 years, common thought was, “Emotions should be controlled and suppressed; they are in the way of us succeeding”, (Goleman,

1995). In the last three decades, a growing body of research is proving just the opposite. In 1872, Charles Darwin renowned for his work in the field of biology and more specifically evolution, contended that it was not the strongest of the species that survives, or the most intelligent, but the one most responsive to change. He also said “We must, however, acknowledge as it seems to me, that a man with all his noble qualities… still bears in his bodily frame the indelible stamp of his lowly origin”. One way to interpret this is that whilst humankind is responsive and adaptive to change, we are still under the powerful influence of our feelings and emotions. According to Wikipedia, Emotional intelligence is the ability to identify, assess and control the emotions of oneself, of others and of groups.

Edward Lee Thorndike, an American educational psychologist, in 1920 described the concept he called social intelligence,  explaining it as “the  ability to understand and manage men and women… and to act wisely in human relations”. “The best mechanic in a factory,” “may fail as a foreman for lack of social intelligence.” This concept of social intelligence spawned the foundation for the Emotional Intelligence we discuss today. Abraham Maslow in 1950s, described his hierarchy of needs. The bulk of his hierarchy and the “higher order needs” he describes are emotional needs. He suggests things like friendship, intimacy, family, self-esteem and self-actualisation are higher level driving forces behind our actions, once we have our safety and physiological needs met.

Reuven Bar-On, a psychologist interested in non-cognitive competences in mid 1980s, sought  to  create  a  measure  of  Social-Emotional  Intelligence.  Bar-On‟s definition  of Emotional   Intelligence   is   “Emotional   Intelligence   is   an   array   of   non-cognitive capabilities, competences and skills that influence one‟s ability to succeed in coping with

environmental demands and pressures”, (Bar-On, 2005). The Bar-On EQ-i is one of the many Emotional Intelligence assessments available on the market. He is considered one of the leading thinkers in Emotional Intelligence.

The year 1990 saw another attempt in the field of the study of Emotional Intelligence. John Mayer, Peter Salovey and later David Caruso were trying to develop a scientific measure of the difference between people‟s ability in the area of emotions. They found that some people were better than others at things like identifying their feelings, the feelings of others and solving problems involving emotional issues. Because nearly all of their writing has been done in the academic community, their names and their actual research findings are not widely known, (Cherry, 2012). In 1992, Daniel Goleman was doing research for a book about emotions when he discovered the 1990 article by Salovey and Mayer. Goleman had apparently asked them for permission to use the term “Emotional Intelligence” in his book and that permission was granted. Before this, it seems his book was planning to focus on “emotional literacy”. The publication of the “Emotional  Intelligence” Why It  Can  Matter More Than  IQ” highlighted Emotional Intelligence  to  the  general  public.  From  the  success  of  this  book,  Goleman  was approached by many business leaders to consult to organisations on how to promote and leverage Emotional Intelligence. This led to him writing his second book “Working with Emotional Intelligence” which took a more business focused look at Emotional Intelligence.  Since  then  Goleman  has  authored/co-authored  several  books  including Primal Leadership, Social Intelligence and Ecological Intelligence. His model is one of the most widely used by individuals and organisations  around the world.

This list is not a complete history of the field of emotional Intelligence, though it does illustrate how far back the principles surrounding it go. Emotional Intelligence is a young science and some even argue it has not yet been fully defined. Many studies and research efforts are underway to help us better understand the definitions, applications and implications of Emotional Intelligence. As the results of these studies are released throughout the next few decades, our understanding and capabilities in the area of Emotional Intelligence will grow. From the foregoing therefore Emotional Intelligence started its journey to prominence in 1920 when Thorndike formulated the concept of “social intelligence”. Since then, other forms of intelligence have been identified by

scholars in the field of psychology. Three clusters of intelligences have been identified. These are: abstract intelligence which pertains to the ability to understand and manipulate verbal and mathematical symbols; concrete intelligence, which describes the ability to understand and manipulate objects; and social intelligence, which describes the ability to understand and relate with people.

Goleman, Boyatzis and Mckee (2001:62) assert that the effective use of emotion is basic to the function of successful leadership. They postulate further that leaders are emotional guides influencing not  only follower emotions but also follower action through that emotional influence. Leaders exercise this influence through relationship management, motivational appeal, and goal setting, and the leader’s emotional intelligence is necessary to effectively perform these efforts.

Bar-On (2005:86) proposes a new model of emotional intelligence, which provides a theoretical basis for the EQ-I, which was originally designed to assess various aspects of this construct as well as to examine its conceptualization. In this model emotional-social intelligence is a cross section of inter-related emotional and social competencies, skills, and factors that determine how effectively we understand and express ourselves, understand others and relate with them and cope with daily demands.

Based on Bar-On‟s model, to be emotionally and socially intelligent is to effectively understand and express oneself, to understand and relate well with others, and to successfully cope with daily demands, challenges and pressures.

At the intrapersonal level, it involves the ability to be aware of one‟s self, to understand one’s strengths and weaknesses and to express one’s feelings and thoughts non- destructively. On the interpersonal level, being emotionally and socially intelligent encompasses the ability to be aware of other’s  emotions, feelings  and  needs  and to establish and maintain cooperative, constructive and mutually satisfying relationships. Thus, to be emotionally and socially intelligent implies the ability to effectively manage personal, social and environmental change by realistically and flexibly coping with the immediate situations, solving problems, and making decisions.

In the 1940s and 1950s, there were several attempts to find a substantial relationship between achievement and personality, but these attempts did not meet with much success.

In 1968, Cattell and Butcher tried to predict both school achievement and creativity from ability, personality, and motivation. The authors succeeded in showing the importance of personality in academic achievement however they could not link it with motivation (Barrier, 1999:118). Barton, Dielman and Cattell (1972:75) conducted a study to more fully assess the relative importance of both ability and personality variables in the prediction of academic achievement. One of the conclusions they reached was that IQ together with the personality factor – which they called conscientiousness – predicted achievement in all areas. What was tested under personality was whether the student is reserved or warmhearted, emotionally unstable or emotionally stable, undemonstrative or excitable, submissive or dominant, conscientious or not, shy or socially bold, tough- minded or tender-minded, zestful or reflective, self-assured or apprehensive, group dependent or self-sufficient, uncontrolled or controlled, relaxed or tensed. All of these factors are included in the components of emotional intelligence (Goleman, 1998:35). In

1983, Howard Gardner introduced his theory of Multiple Intelligences, which opened doors to other theories like Emotional Intelligence (Book & Stein, 2000:43).

One of the most significant emotional intelligence breakthroughs took place in 1980, when the American-born Israeli psychologist Dr. Reuven Bar-On began his work in the field. He was perplexed by a number of basic questions. Why, he wondered, do some people  possess  greater  emotional  well  being?  Why are  some  better  able  to  achieve success  in  life?  And,  most  importantly why  do  some  people  who  are  blessed  with superior intellectual abilities seem to fail in life, while others with more modest gifts succeed? By 1985, he thought he had found a partial answer in what he called a person’s Emotional Quotient (EQ), an obvious parallel to the long-standing measures of cognitive or  rational  abilities  that  we  know  as  IQ,  or  Intelligence  Quotient  (Book  &  Stein,

2000:63).

Emotional Intelligence and Demographic Factors

Schutie et al. (2008:164) in their study did not find a significant gender difference in total measured  trait  emotional  intelligence  (EI).  They  did  find,  however,  a  significant difference on the “social skills” factor of the questionnaire with females scoring higher than males. This was in the opposite direction from the difference in self- estimated high, when… males‟ self-estimates were higher than females‟, which indicates that the process of sell-estimation is biased. The nature (self enhancement versus self-derogation) and source (male versus female) of this bias are unclear. It could be, for example, that males self-enhance and females self-derogate: that both genders self-enhance with males more

so than females; or that males are accurate and females self-derogate. It may be argued that the bias is more likely to be self-derogatory and on the side of females since, on the whole, the correlations between measured and self-estimated EI were lower for females than  for  males.  However,  Nordien  (2001:68)  finds  out  that,  there  is  a  significant difference between emotional intelligence according to age group. Based on Rahayu (2004:91), she finds out that there is no significant difference between emotional intelligence and marital status.

Meaning of Workplace Deviant Behavior

Workplace deviance refers to voluntary behaviors by employees that violate significant company norms, policies, or rules and threaten the well-being of the organisation and/or its members (Robinson & Bennett, 2005:61). Examples of workplace deviance include both  behaviors  directed  at  organisations  (e.g.,  theft,  sabotage,  coming  to  work  late, putting little effort into work) and individuals in the workplace, such as supervisors or co- workers (e.g., making fun of others, playing mean pranks, acting rudely, arguing). Until recently, workplace deviance has been a neglected topic in organisational research (Greenberg & Scott, 2006:94). Bennett and Robinson (2000:86) suggest categorizing deviant behaviors into two primary families based on the target of the behavior: organisational deviance and interpersonal deviance. Organisational deviance refers to deviant behaviors directed toward the organisation, examples of which include tardiness, wasting organisational resources, and stealing from the organisation; interpersonal deviance refers to deviant behaviors that are directed toward other employees in the organisation and examples include gossiping, verbal abuse, and stealing from co-workers (Robinson & Bennet, 2005:33). This target-based, two family perspective of deviance is consistent with past research of negative organisational behavior.

In every work environment, there is always the tendency to understand the perceptions of workers inorder to get them contribute willingly to the growth of the organisation. This is the concept of Emotional Intelligence (EI). As notes Humphrey (2010:161) Emotional Intelligence is a measure of someone’s ability to understand the emotions of themselves and  others.  As  Moha  (2012:36)  puts  it,  “it  is  quite  difficult  for  someone  to  truly understand his own emotions talkless of others”. To really understand the reason for every action of somebody is impossible. Moha notes that it is through the vehicle of behaviour  that  others  weigh  the rationale for  behaving in  a  certain  way.  Emotional Intelligence, as observed by Pollack (2011:88) is lunged in such theories as: Integrity, Reality, Responsibility, key moments, vision, purpose and value.

The Integrity Model

Mollock (2012:36) notes that integrity model entails:

          Understand the process of self-mastery

          Learn the flaw inherent in the common symbols of success

          Develop a new definition of success based upon your personal paradigm.

          Experience the power of your personal paradigm.

          Learn the four different paradigms from which people live

          The core beliefs of each paradigm.

Embrace Reality

Reagan (2012:33) says that embracing reality entails to:

          Understand the nature of reality.

          Learn the importance of aligning your life to reality.

          Accept some of the difficult realities of your life.

          Explore and let go of resentments, complaints, and blame.

          Learn to live in the here and now.

Exercise Responsibility

Boyaltzis (2002:63) observes that exercising responsibility means to:

          Learn the meaning and nature of personal responsibility.

          Understand how you avoid taking responsibility for yourself.

          Assess your willingness to accept personal responsibility.

          See the choices available in your life.

          Understand the power and freedom that comes from accepting responsibility.

Conquering your Key Moments

Hawver (2011:12) states that in order to conquer one‟s challenges, it is necessary to:

          Understand how you respond to challenging or upsetting events (key moments).

          Explore and understand the patterns in your responses to key moments.

          Develop a process for exploring the consequences of your behavior.

          Choose positive behaviors and feelings during your key moments.

          Identify and challenge the distortions in your interpretations.

          Learn a method for changing weakening beliefs to empowering beliefs.

Clarify your Vision

Boyle (2008:64) observes that to clarify vision, one need to:

          Understand the meaning and power of vision,

          Clarify your personal vision.

          Evaluate the thoughts that keep you from living your vision.

          Set goals to achieve your vision.

Define your Purpose

Ronald (2009:99) says that the essence of defining purpose is to:

          Understand the difference between three kinds of vision.

          Write your personal purpose statement.

          Clarify your guiding principles.

            Develop  affirmations  to  support  you  in  living  your  purpose  and  guiding principles.

          Use the technique of visualization to make your vision a reality.

Value who you Are

Pollack (2009:36) says that the concept of value means to:

          Understand the meaning and importance of self-esteem.

          Become the primary source of your self-esteem.

          Accept your imperfections.

          Learn to make time for self-renewal.

          Acknowledge and build upon your strengths.

          Maintain an attitude of gratitude

Today, emotional intelligence is a popular topic of many discussions among academic scholars and corporate executives. What exactly is emotional intelligence, and what role does it play in organisational effectiveness? In this work, we attempted to answer these questions by providing definitions and a brief history of emotional intelligence (EI); by discussing the key components of emotional intelligence and the importance of EI in the business world, and, finally, by presenting EI training techniques in a classroom.

The study of emotional intelligence evolved from works by such theorists as Gardner (1983:87) and Williams and Stemberg (1988:93), who proposed broader approaches to understanding intelligence.  Salovey and  Mayer  (1990:133)  coin  the term  “emotional intelligence” and included Gardner‟s intrapersonal and interpersonal components in the

construct. Goleman (1998:54) popularizes emotional intelligence in the business realm by describing its importance as an ingredient for successful business careers and as a crucial component for effective group performance.

These theorists and many others defined and explained the concept of emotional intelligence. In the course of this research, at least a dozen definitions of emotional intelligence  (EI)  were   found.  Four  most  popular  ones  are  included.  Emotional intelligence (EI) can be defined as:

          “the  ability  to  monitor  one’s  own  and  others’  feelings  and  emotions,  to discriminate among them, and to use the information to guide one’s thinking and action” (Mayer & Salovey, l993:162).

          “the intelligent use of emotions: you intentionally make your emotions work for you by using them to help guide your behavior and thinking in ways that enhance your results” (Weisinger, 1998:10).

          “the ability to recognize and respond to the emotions and feelings of others, as well as the skill to help others manage their emotions” (Schmidt. 1997:33).

          “the ability to: (1) be aware of, to understand, and to express oneself; (2) be aware of, to understand, and to relate to others; (3) deal with strong emotions and control one’s impulses; and (4) adapt to change and to solve problems of a personal or a social nature (Reuven Bar-On, 1988:25).

Although many definitions exist, the basic ideas are the same. Emotionally intelligent people are aware of their emotions and the emotions of others. They use that information to guide their thinking and actions. The question here is: What is it that determines whether a person is emotionally intelligent?

This   study   focused   on   the   impact   of   emotional   intelligence   on   organisational effectiveness, with special emphasis on the Nigerian Petroleum Industry, centering on Shell Petroelum Development Company of Nigeria (SPDC) Limited, Total Nigeria Plc and Chevron Nigeria Plc, all located in the South South, South East Geopolitical Zone Nigeria.

1.2       STATEMENT OF THE PROBLEM

The core assets of modern business enterprises lie not in buildings, machinery and real estate, but in the intelligence, understanding, skills and experience of employees. Harnessing the capabilities and commitment of knowledgeable workers is – the central managerial challenge of modern time. The challenge of managing the most intangible asset – managing what cannot be seen – the managers ability to influence employees‟ attitudes and emotions is a certain question that managers need to wrestle with. The manner in which they respond to these questions goes a long way toward determining the organisation‟s enthusiasm, commitment and ultimate performance.

The ineffective management of people in teams produces poor performance levels and greater organisational ineffectiveness. Lack of emotional intelligence gives bad information  about  oneself,  other  people  and  situations.  By  not  tapping  into  the information that emotions provide, individuals are not able to alter their behaviour and thinking in such a way that they can turn a situation around. Emotions play an important role in the workplace. The key is to use emotions intelligently, which is exactly what is meant by emotional intelligence. Individuals intentionally make their emotions work for them by using them to help guide their behaviour and thinking in ways that enhance their results.

Emotional intelligence (EI) has become something that is very important in human life. Researchers have concluded that people who can not manage their own feelings well and deal effectively with others, are more likely not to live content lives. This is because it is the ability to perceive emotion in others and express one’s emotions; use emotions to guide thinking in self and others; understand how emotions operate; and manage and regulate emotions in self and others.

Individuals who are emotionally intelligent have the ability to regulate, or change the emotions of the people they interact with at work. Emotions have important effects on the way people think. Pleasant emotions can make employees think more creatively.  In contrast, unpleasant emotions can help employees focus on specific problems or issues. Emotionally intelligent individuals use specific emotions to facilitate various cognitive activities. Perceiving emotion encompasses the abilities to identify emotions in oneself and in others.

Low trait EI may be a key ingredient in a variety of deviant behavior, many of which have been repeatedly linked to emotional deficits. In prior study, it has demonstrated that it can have useful purpose in explanation of workplace deviant behavior. Recently, production  has  been  disrupted  intermittently in  the  Nigerian  Petroleum  Industry,  by protests of the Niger Delta‟s inhabitants, who feel they are being exploited. So, in this study there is need to explore the impact of Emotional Intelligence on the effectiveness of Petroleum Firms in Nigeria.

1.3       OBJECTIVES OF THE STUDY

The primary objective of this study in line with the identified problems is to determine the  effect  of  Emotional  Intelligence  on  organizational  members  productivity and  its ultimate impact on Organizational Effectiveness. This is done by determining:

1.         How emotional intelligence influence employees‟ behaviour at work.

2.         The extent to which emotional intelligence affects organziaitonal productivity.

3.         The   importance   of   interpersonal   competencies   on   organizational   resource acquisition.

4.         The  nature  of  relationship  between  social  skills  competency  and  strategic constituencies satisfaction.

1.4       RESEARCH QUESTIONS

1.         How does emotional intelligence influence employees‟ behaviour at work?

2.         To what extent does emotional intelligence affect organisational productivity?

3.         How  does  empathy  as  an  element  of  emotional  intelligence  interpersonal competencies influence harmonious organizational resource acquisition?

4.         How is social skills competency related to strategic constituencies satisfaction?

1.5       RESEARCH HYPOTHESES

The following research hypotheses were formulated for the study

1.         Emotional intelligence influences employees‟ behaviour at work positively.

2.         Emotional intelligence affects organisational productivity positively.

3.         Emotional    intelligence    interpersonal    competencies    promotes    harmonious organizational resource acquisition.

4.         Emotional intelligence social skills competency has a positive relationship with strategic constituencies satisfaction.

1.6       SIGNIFICANCE OF THE STUDY

Managers: Managers in public and private organizations will benefit from this study. This is because, managers who are attuned to their own feelings and the feelings of others can enhance the performance of themselves and others in their organizations. Success in the knowledge economy comes to those who know themselves, their strengths, their values and how they best perform. The more individuals and leaders know about themselves, the better they are able to understand how they are perceived by others and why others respond to them in the manner they do.

The Academia: The academia and students will also benefit from this study. This is because it will serve as a pivot for further studies.

The Researcher: The researcher shall be the primary beneficiary of this work. This is because this work is in partial fulfillment of the requirements for the award of the degree of Doctor of Philosophy (Ph.D), in management.

1.7       SCOPE OF THE STUDY

The work looked into the impact of emotional intelligence on the productivity of the Nigeria petroleum industry operating within the South South and South East Geopolitical Zones, Nigeria. The study was carried out only at the Shell Petroleum Development Company Nigeria (SPDC) Limited, Total Nigeria Public Liability Company and Chevron Nigeria Public Liability Company. The choice of these organisations is hinged on the fact that they are among the biggest and oldest operators in the Nigerian Petroleum Industry and it is believed that any inference on these organisations can be generalised on other operators in the Nigerian Petroleum Industry. This is because they all have many things in common and operate within the same environment. In addition, the study made general references to the Nigerian Petroleum Industry as the need arose.

1.8       LIMITATIONS OF THE STUDY

A study of this nature being carried in this period of global economic recession, was faced with a number of limitations. These include;

Finance: The researcher faced serious financial constraint, since the study was a pure research and had no sponsor.   However, the researcher provided adequate finances to prosecute a high quality research work.

Time: Time was also a major constraint, as the researcher had to juggle with some other opposing ends requiring his attention, family, personal, academic etc. However, the researcher devoted adequate time to overcome this constraint.

Respondents’ attitude: Information dissemination is the life blood of research and its restriction retards every research effort. The indifferent attitude of respondents was a serious constraint. However, the respondents were assured that the study was entirely an academic exercise and has nothing whatsoever to do with their job and production and that all information will be treated with strict confidence.

1.9       DEFINITION OF TERMS

1.9.1    Emotional Intelligence

This is the ability to identify, assess and control the emotions of oneself, of others and of groups. Thus, to be emotionally and socially intelligent implies the ability to effectively manage personal, social and environmental challenges by realistically and flexibly coping with immediate situation, solving problems and making decisions.

1.9.2    Organisational Effectiveness

This is the efficiency with which an organization is able to meet its objectives. Organizational effectiveness indices include; Goal accomplishment, Resource acquisition, Internal process and Strategic constituencies satisfaction. The satisfaction of key interest groups is an important criterion of organizational effectiveness.

1.9.3    Individuals

These are the respondents of the study within the selected organisations. They are the sample elements of the sample space.

1.9.4    Mental Ability Model

Performance-based models that focus on the interplay of emotion and intelligence as traditionally defined (Brackett & Mayor 2003; Mayer, Salovey & Caruso 2000a). Mayer, Caruso & Salovey (2000:336) argue that this model measures „a set of abilities, an actual intelligence‟. Testing of EI is by asking an individual to solve problems. Mayer and colleagues believe, „Ability testing is the gold standard in intelligence research because intelligence corresponds to actual capacity to perform well at mental tasks, not just one‟s beliefs about those capacities‟ (Mayer, Caruso & Salovey, 2000:325).

1.9.5    Individual Success

This study argues that individual success is dependent upon managers taking action to apply emotional intelligence for star performance. Ghoshal (Mann, 2000:20) says of successful individuals, „Those who take action all have a picture in their head‟ Goleman (2000b:17) defines star performance as „the natural consequence of developing and using certain emotion competencies and skills‟. Hay Group (2005), with which Goleman is associated, promotes emotional intelligence for star performance: ‘Emotional intelligence is twice as important as IQ plus technical skills. Emotional intelligence is more than 85 percent of what sets star performers from the average‟.

1.10     PROFILE OF THE NIGERIAN PETROLEUM INDUSTRY

According to the Nigerian National Petroleum Company Website http://www.nnpcgroup. com/NNPCBusiness/Busi…, Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. The discovery was made by shell – BP, at the time the sole concessionaire. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. In 1965 the EA field was discovered by shell in shallow water southeast of Warri.

In 1970, the end of the Biafran war coincided with the rise in the world oil price, and Nigeria was able to reap instant riches from its oil production. Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971 and established the Nigerian National Petroleum Company (NNPC) in 1977, a state owned and controlled company which is a major player in both the upstream and downstream sectors.

Following the discovery of crude oil by Shell D‟Arcy Petroleum, pioneer production began in 1958 from the company‟s oil field in Oloibiri in the Eastern Niger Delta. By the late sixties and early seventies, Nigeria had attained a production level of over 2 million barrels of crude oil a day. Although production figures dropped in the eighties due to economic slump, 2004 saw a total rejuvenation of oil production to a record level of 2.5 million  barrels  per  day.  Current  development  strategies  are  aimed  at  increasing production to 4 million barrels per day.

Petroleum production and export play a dominant role in Nigeria‟s economy and account for about 90% of her gross earnings. This dominant role has pushed agriculture, the traditional mainstay of the economy, from the early fifties and sixties, to the background. The  major  players  in  the  Nigerian  Petroleum  Industry  include;  Shell  Petroleum Development Company of Nigeria (SPDC), Total Nigeria Plc and Chevron Plc. etc.

1.10.1  Shell Petroleum Development Company of Nigeria (SPDC)

According to Shell Website; http://www.shell.com.ng/../spdc/, SPDC is the pioneer and leader of the Petroleum Industry in Nigeria. It has the largest acreage in the country from which it produces some 39 percent of the nations oil.

The company‟s operations are concentrated in the Niger Delta and adjoining shallow offshore areas where it operates in an oil mining lease areas of around 31,000 square kilometres.

SPDC has more than 6,000 kilometres of pipeline and flowlines, 87 flowstations, 8 gas plants and more than 1,000 producing wells. The company employs more than 4,500 people directly of whom 95 per cent are Nigerians. Some 66 per cent of the Nigerian staff members are from the Niger Delta. Another 20,000 people are employed indirectly through the network of companies that provide supplies and services.

SPDC and its Joint Venture Partners

SPDC is the operator of a Joint Venture Agreement involving the Nigerian National

Petroleum Corporation (NNPC), which holds 55%, Shell 30%, EPNL 10% and Agip 5%.

Genesis

SPDC was originally known as Shell D‟Arcy and later as Shell-BP which was jointly financed by the Royal Dutch/Shell Group of Companies and the British Petroleum (BP) Group on an equal basis. Shell discovered the first commercial oil field in Nigeria at Oloibiri Bayelsa State, in 1956 and through a sustained exploration effort had since discovered more oil fields that have firmly established Nigeria as one of the world‟s major oil producers with significant gas potential.

SPDC Today

Together with its Joint Venture Partners, SPDC is capable of producing some 1 million barrels of oil per day on an average. Through its community investment programme, SPDC is demonstrating its commitment to improving the quality of life for all those who

live and work in the Niger Delta. As one of the world‟s leading energy companies, Shell plays a key role in helping to meet the world‟s growing energy demand in economically, environmentally and socially responsible ways. In Nigeria, Shell operated companies SPDC, SNEPCO and SNG employ more than 6,000 direct employees and contractors of which over 90% are Nigerians.

Shell has been active in Nigeria since 1937. Their business activities are exploring and production of oil and gas onshore and offshore and sales and distribution. She also has an interest in Nigeria‟s largest liqufied natural gas plant (NLNG). Shell has offices at Port Harcourt, Warri, Lagos and Abuja.

Shell in Nigeria

            Since the 1960s, SPDC has been at the forefront of efforts to develop Nigeria‟s gas resources and is currently the sole supplier of gas to domestic customers. She currently produce about 70% of Nigeria‟s gas supply.

            Although its footprint impacts directly in only a tiny fraction of the Niger Delta, SPDC‟s operations in the Niger Delta are spread over 30,000 square kilometre. They include a network of more than 6,000 kilometres of flowlines and pipelines,

90 oil fields, 1,000 producing wells, 72 flowstations, 10 gas plants and two major oil export terminals at Bonny and Forcados.

          SPDC operates the Bonny crude oil terminal, is the largest of its kind in Africa.

The Bonny associated gas plant can harness 20 million standard cubic feet of gas a day-enough to provide power to more than 200,000 average European households.

          Mutiu Sunmonu is the Country Chairperson for the Shell Companies in Nigeria.

Contribution

Shell‟s main contribution to communities in the Niger Delta is through the taxes and

royalties they pay to the federal government.

The  joint  venture  operated  by  the  Shell  Petroleum  Development  Company  Nigeria Limited (SPDC) has contributed about $31 billion to the government in the past five years (2006 – 2010). The Federal Government receives about 95% of the revenue after costs  from  the  SPDC  operated  joint  venture.  The  Shell  Nigeria  exploration  and Production Company of Nigeria Limited (SNEPCO) – which operates offshore business in deep water – has paid about $3.8 billion in tax and royalties over the last five years.

In addition to generating revenue, Shell Companies in Nigeria actively promote projects in the Niger Delta that support small businesses, agriculture, training, education, health care and capacity building. Much of which is done in partnership with the government and the Niger Delta Development Commission.

In 2010, Shell operations contributed $161.13 million (Shell share $59.8 million), to the commission, as required by law. SPDC and the joint venture partners contributed directly a further $65.6 million (Shell share $19.7 million), to community development projects, many of which were delivered in  partnership  with others. Shell work  together with government agencies, companies, local and international NGOS, and the United Nations Development Programme (UNDP). Shell also pays a share of its profits into an education fund for the rehabilitation, restoration and consolidation of education in Nigeria.

1.10.2   Total Nigeria Plc

TOTAL Nigeria Plc, formerly known as TOTALFINAELF Nigeria Plc, is the entity which emerged following the successful merger between TOTAL NIGERIA PLC and ELF OIL NIGERIA LTD on 11th September, 2001.

TOTAL NIGERIA PLC with RC 1396 was incorporated as a private company on 1st June, 1956 to market petroleum products in Nigeria. It became TOTAL NIGERIA LTD in 1967, and TOTAL NIGERIA PLC in 1978 after it went public in accordance with the Nigerian Enterprises Promotion Decree (1977) with N10,000,000.00 share capital held by Nigerian shareholders and Total S.A. (a French Company) as the Principal Shareholder.

ELF OIL LTD was also incorporated as a Private Liability Company on 20th November,

1981  to  engage  in  the  business  of  marketing  petroleum  products,  lubricants  and chemicals. Elf Acquitaine S. A. a French Company held 67% of the authorised share capital while Enifor Limited held 33%.

The share capital of TOTAL Nigeria Plc after the merger is presently N169,760,918.00, made up of 50k ordinary shares authorised and fully paid up. TOTAL S.A. Paris holds

45.24%, ELF Acquitaine Paris holds 16.48%, Enifor Limited holds 8.12% while other

Nigerian Shareholders hold 30.16% of the share capital.

Growth

TOTAL Nigeria Plc commissioned its first filling station at Herbert Macaulay Street, Yaba Lagos in 1956. The Company has since expanded its business through a network of over 500 retail outlets and corporate customers and organisations that are served through

five regions. The Regions are West, Mid-Western, Eastern, Far North and North-Central. The company also enjoys Bulk storage facilities at Apapa, Ibafon, Kano, Kaduna and Bukuru Depots.

TOTAL Nigeria Plc with the support of Air Total International Paris is well established as one of the major suppliers of Aviation fuel to the Aviation Industry in Nigeria. Indeed, Total is currently one of the two largest suppliers of JET AI fuel in Nigeria today, offering excellent fuelling services at Lagos Airports (Domestic and International), Kano, Abuja and Port Harcourt Airports.

In order to maintain and consolidate its unique position in the Oil Industry, the Company has invested in the establishment of three Lubricants Blending Plants at Koko in Delta State, another at Kaduna in Kaduna State and Apapa in Lagos State. It has also invested in the bottling of liquefied Petroleum Gas (LPG). TOTAL Nigeria Liquefied Petroleum Gas (LPG) is now in popular demand in many homes and industrial concerns in Nigeria. The Company has ten LPG bottling plants strategically located in different  parts of Nigeria with a coastal storage in Apapa, Lagos.

The Company has well over 500 employees who are its most vital resources. A cordial management/staff relationship has been maintained over the years through progressive welfare schemes – a vital factor in enhancing and sustaining employee‟s efficiency, morale and productivity.

At the heart of the TOTAL care value is the Group‟s well – known insistence on Quality Products and the safety of the Environment as well as the individual. In all TOTAL subsidiaries,   considerable   resources   are   employed   in   maintaining   the   Group‟s International Culture in these areas.

Leadership

TOTAL NIGERIA PLC is today, a leader as well as the symbol of good service in Petroleum Products Marketing in Nigeria. The Company maintains excellent corporate relations with the general public and investors‟ confidence in its performance is tremendous. This is clearly depicted by the pricing of the share of the Company in the trading market at the Nigerian Stock Exchange. Today, the company stock is the most sought after in the petroleum – marketing sector and in the Nigerian Stock Exchange at large. http://www.total.com.ng/Os/osnigeria.nsf/vs

1.10.3  Chevron Nigeria Plc

According to Chevron Nigeria Plc‟s Website; http://www.chevron.com> Home> chevronworldwide, Chevron Nigeria Plc is one of the world‟s leading integrated energy companies and conducts business worldwide. Their success is driven by their people and their commitment to get results the right way-by operating responsibly, executing with excellence, applying innovative technologies and capturing new opportunities for profitable growth. Chevron is involved in virtually every facet of the energy industry. They explore for, produce and transport crude oil and natural gas; refine, market and distribute  transportation  fuels  and  lubricants;  manufacture  and  sell  petrochemical products; generate power and produce geothermal energy efficiency solutions; and develop the energy resources of the future, including research for advanced biofuels.

Company Roots

Their beginnings are traced to an 1879 oil discovery at Pico Canyon,  north of Los Angeles, which led to the formation of the Pacific Coastal Oil Company. That company later became Standard Oil Company of California and subsequently, Chevron. They took the name Chevron when they acquired Gulf Oil Corporation in 1984, nearly doubling their worldwide proved crude oil and natural gas reserves. Their merger with Gulf was then the largest in U.S. history.

Another  major  branch  of  the  family  tree  is  the  Texas  Fuel  Company,  formed  in Beaumont, Texas, in 1901. It later became known as The Texas Company and eventually, Texaco. In 2001, their two companies merged. The acquisition of Unocal Corporation in

2005 strengthened Chevrons position as an energy industry leader, increasing their crude oil and natural gas assets around the world.

Scope

Chevron‟s diverse and highly skilled global workforce consists of approximately 57,000 employees  and  about  3,800  service  station  employees.  In  2011,  Chevron‟s average production was 2.673 million barrels of oil-equivalent per day. About 75% of that production occurred outside the United States, majoring in Nigeria. Chevron had a global refining capacity of 1.96 million barrels of oil per day at the end of 2011.

Technology and Emerging Energy

Technology is propelling Chevron‟s growth. They are focusing on technologies  that improve their chances of findings, development and producing crude oil and natural gas. They are also investing in the development of emerging energy technologies, such as finding better ways to make nonfood-based biofuels, integrating advanced solar technology into their operations and expanding their renewable energy resources.

Environment and Safety

As a company and as individuals, Chevron take great pride in contributing to the communities where they live and work. They also care about the environment and are proud of the many ways in which their employees work to safeguard it. Their persistent efforts to improve on their safe work environment continue to pay off. In 2011, Chevron achieved significant levels of safety as measured in days-away-from-work ratings in both Upstream and Downstream operations.

Work

Chevron  recognizes  that  the world  needs  all  the energy they can  develop,  in  every potential form. That is why they work daily to find newer and cleaner ways to power the world.   As at 2010, Chevron Nigeria Plc has more than 6,600 members of staff in their employment. http://www.chevron.com/documents/pdt/CNL-2…

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