ABSTRACT
This Project work was based on the
role of public Relation is conflict management between oil producing
communities and oil companies. The study
was however contained to two major oil companies namely, the shall petroleum
Development Company (SPDC) and the part.
Harcourt Returing Company (PHRC). In addition, Eleme Local Government Area
Ikwere Local Government Area all in Rivers
State which are lost
communities to both shell and PHRC were used as case study.
To ensure that the aim is achieved,
the work was divided into five chapters, while chapter one deals with the
introduction to the Project, Including the theory base, research problems and
hypothesis as well as scope and objectives and assumptions of the study,
chapter Two involved literature
Review. The research methodology in
chapter three included the research design, sample instrument, data collection
and analysis, procedure, while the expected results were also outlined.
The data collected in respect of the
project were analysed in chapter four and elaborate discussions on the topic
made. While in chapter five, the study was summarized, conclusion drawn and
recommendation made.
CHAPTER ONE
1.0
INTRODUCTION
1.1 THE
BACKGOUND OF THE STUDY
The Importance of petroleum to Nigeria can
only be fully appreciated when one realizes the dominant role it plays in our
economy. Petroleum production and export
is the anchor of the Nigerian economy providing almost 90 percent of our export
earnings. The communities where these oil producing companies were sited are
not left out from being beneficiaries.
Moreover, oil prospecting began in
Nigeria as far back as 1908, when a German Company, the Nigeria Bitumen
corporation started exploration in the Araromi area west of Nigeria, now Undo
State. Their pioneering efforts, however
ended with the outbreak of the first world war in 1914. In 1937, oil prospecting resumed in Nigeria,
shell D’ Arey ( The foreunner of the present shell Petroleum Development
Company of Nigeria) was awarded the sole concessionary rights covering the
whole territory of Nigeria. Their
activities were again interrupted by the second world war, but resumed in 1947,
however, it was not until 1956 that oil was discovered in commercial quantities
at Oloibiri in the Niger Delta after several years of search and an investment
of over N30 Million. Shell started oil production
and export from its Oloibiri field in 1958.
By 1961, other companies such as
Mobil, Agip, Safrip, Texaco (Now Total thira) had be an exploration activities
for oil are of Nigeria. The exploration which had formerly been grant
to shell alone, was no extend to the newcomers in line with the Government’s
policy of increasing the face of exploration in the country through which
more communities came to be
beneficiaries.
The main objective of oil companies
today is the exploration and production of oil and other hydrocarbons.
Today, oil revenue from the mainstay
of the economy, unlike the early tities and sixties, agriculture was the
traditional economic blessing of the country. With the little or non-functioning of agricultural
production, oil companies are therefore, expected to labour harder to achieve
the expectation and objectives of this beloved country known as the produced of
the “black goldâ€. The communities also
have increased in their pronounced need for compensation from oil spillage. This was how public relations machinery came
into the surface to be the middleman to dialogue between the communities and
the companies existing within their premises.
It was in this process in 1969 that
the Federal government backed up the business of oil exploration and
exploitation with the instrument of law, thereby making hydrocarbons discovery
in the country an exclusive property of the Federal Government. The oil prospecting decree was promulgated in
1969.
Subsequently, the land-use Act of
1978, equally vested on the Governor or Chief executive of a state, the
ownership of the entire land that belongs to that state. Therefore, the land and every thing discovered beneath or
above was the property of the Governor or Chief Executive.
Therefore, as the exploration and
exploitation of oil sectors manifested day-by-day, various host communities
because more and more sophisticated in terms of benefits in such areas like
education, information and more purposeful and dogged. In the demand for what they feel, rightly
should belong to them, especially in ensuring that the activities of the oil
companies do not send the communities into extinction through environmental
hazard. Therefore, they began to see the
need to ask for compensation and other benefit from the companies and also to
pressurize the government to use part of the revenues, darned from oil in the
development of their communities.
This extend to the for improvement of
the economic situation surrounding their localities such as demanding for
employment for the educated youths, also
for the unskilled youths for labour, and improved social amenities as pipe
borne water supply, electricity supply, building of good roads and rewarding of
scholarship to their children etc. These
various communities also see the oil companies as exploits when their demands
were not met, and so, began to protest against the contained exploitation of
such activities on their environment.
As a matter of fact, since the
government is a sophisticated entity that the communities may not be able to
contend with, they helplessly turned to the oil companies to unleash their
anger. This is the crux of the matter.
Crisis situation have caused a lot of
problems between the host communities and the oil companies.
Some
of these problems include:-
1.
The
vandalization of pipe lines.
2.
A
serious case of insecurity of the employee of oil companies.
3.
A
very poor relationship between the host communities and oil companies.
4.
Serious
cases of sabotage against the oil companies.
5.
A
drastic fall in the nation’s oil reserve and foreign earnings as a result of
disagreement between host communities and oil companies.
6.
These
have also resulted in the death of hundreds of people from the host communities
due to government’s effort to forestall the vandalization of oil companies’
installations.
To
resolve these crises, Nigerian National Petroleum
Corporation
(NNPC), shall petroleum Development Company, Total Tina and other companies
have adopted public Relations strategies aimed at “achieving better
understanding of these companies’ role and contribution to the improvement of
life in the communities in which they operate and thus reducing the disruption
of their operations through subsequent crises.
This is the justification given to the work this study.
1.1.2 GOVERNMENT INVOLVEMENT IN THE ROLE
INDUSTRY AND THE BIRTH OF THE NNPC (NIGERIA NATIONAL PETROLEUM CORPORATION).
The role of the government in the oil
industry has gradually progressed from a regulatory one to direct involvement
in oil exploration and exploitation, initially, government interest was only
limited to the collection of royalties and other dues offered it from the oil
companies and making rudimentary laws to regulate the activities of the oil
industry. This was pertly due to the
fact that oil was very insignificant to the economy before the late sixities
and the relative lack of trained per personal and expertise.
By 1971, a year after the Nigerian
Civil War, oil had become very important to the economy. To strengthen and establish therefore, the
Nigerian National Oil Corporation (NNPC) was established by decree in 1971, as
an integrated oil company, it was also in that year that Nigeria joined
the Organization of Petroleum Exporting Countries (OPEC) as the 11th
member country. The NNPC had
responsibility for both upstream and downstream activities in the industry
Port-Harcourt Refining Company Limited (PHRC) is therefore one of the
subsidiaries of NNPC and provided qualitative refining services for domestic
and international markets oil at competitive priced.
1.1.3 HISTROY OF SHELL IN NIGEIA
The present shell Petroleum
Development Company of Nigeria Limited (SPDC) is the pioneer or the largest
hydrocarbon exploration and production company in the country. It was originally known as shell D’ Arey and
later shell which was jointly financed by Royal Dutch/shell group of companies
and the British Petroleum (Bp) group on an equal basis. The company was granted an oil Exploration
Licence on November 4, 1938
but reconnaissance and geophysical surveys started in selected areas in
1937. the Company which was incorporated
in Nigeria
in September, 1951 drilled the first exploration well at Ihuo, North West
of Warri. But its first successful well
and the first commercial oil field in the country was discovered at Oloibiri, Rivers State
in January 1956, of course, these has been several unsuccessful wells
drilled. The company changed its name
from shell. D’ Arey to shell Bp Petroleum Development Company of Nigeria
Limited in April 1956. the company
shipped its first crude oil from Oloibiri to the outside world on February 17, 1978,.
The rate of daily production by the
company as at the time was 6,000 barrels of crude oil per day which has
steadily licensed to the current productions potential of more than one million
barrels per day.
Shell Nigeria has two operating
divisions: the Eastern Division based in
Port-Harcourt and Western Division based in Warri. The official opening of the Port-Harcourt
office took place on June 7,
1961 while that of Warri was on May 29, 1971. the company’s corporate planning groups were
based in Lagos. The company’s export crude oil from its two
terminals namely: Bonny Terminal in Rivers State
which was commissioned in April 1961 and Forcades Terminal in Delta State
Commissioned on September
27, 1991. the Lagos office was formally
opened in October 1972. the Federal
Government on April 1973 acquired 35% participation in the company’s
lease. On April 1974 government
increased its share to 55% and nominated their Nigerian National Oil Company
(NNOC) to represent its interest in the fount venture through a decree. On April 1, 1977 NNOC was integrated into the Nigerian
National Petroleum Corporation (NNPC).
In the third participation agreement
in conformity with the Nigeria Enter prices promotion Decree. The government increased its participation to
60% in July 1979. on August 2, 1979, Bp’s
interest in the them NNPC shell Bp fount venture was taken over by the
government to 80 06 while shell had 20 60.
Consequently, on December 13th , 1979, the name of the
company operating the joint ventures was then change to “shell petroleum
Development Company of Nigeria Limitedâ€.
On August 22, 1994
NNPC and shell signed an agreement.
Consolidating the joint venture arrangement between them since 1973 and
the memorandum of understanding was signed in January 1986.
The Federal Government of Nigeria
rationalized its interest in the NNPC/SHELL joint venture from 80% to 60% on June 30, 1989 while shell’s
participation increased to 30%. Then E
if and Agip acquired 50% each, later, a new memorandum of understanding and a
joint operating Agreement between NNPC and its partners were signed.
1.1.4 PUBLIC RELATION PRATICE IN PORT HARCOURT REFINING
COMPANY LIMITED (PHRC) AND SHELL DEVELOPMENT COMPANY OF NIGERIA
Public Relations in PHRC and shell is
as old as the company itself, both companies had their pubic relations
Departments from the onset. For
instance, Chief Kanu Offanry was the first head of Department in shell, while
Darrick Wakama is the present Head pf PHRC, Alesh Eleme
Rivers State. By 1958, the public affairs department, of
shell which was based in Port Harcourt
moved to the Head quarters in Lagos with branches in
the Western and Eastern Divisions located in Warri, Lagos and port-Harcourt.
The shell and PHRC Public Affairs
controlled matter on :-
(a)
Community
activities
(b)
Government
affairs
(c)
Media
activities
Some
of the community relations activities include:-
1. Agricultural extension services,
focusing on key crops like cassava, yams, rice, pineapple and fish farms. The essence is to encourage farming skills in
the communities.
2. Cassava factories were
established to encourage the development of local machinery factor for cassava
processing.
3. The provision of water boreholes,
building of classroom blocks, furniture and laboratory equipment for local
schools and provision of equipment for rural cottage clinic and hospital. This is only area the PHRC assists in
community relations.
4. Giving of awards to best students
and scholarships.
To
do these, the communities were zoned for equitable distribution of the
amenities by shell.
Media and Government Relations
The company organizes oil seminars for
government and its own officials. The
objective is to educate the participants and to provide avenue to exchange
Yocos on the industry, at least five times every year.
1.2 STATEMENT OF RESEARCH PROBLEMS
This study will attempt an assessment
of Public relations strategies in Community Crisis, Community Management, and
the Community Public Relations in Crisis Management.
It will further determine whether NNPC
and shell have been experiencing community crisis with their host communities
in recent years and in the past.
The study will also find out whether
these crisis interrupt their operations and reduce their production
capacity.
Also, it will help in finding out if
PHRC and shell use public relations strategies in managing these crises than
any other method.
And finally, it will also examine if
PHRC and Shell’s Public Relations Departments are more effective in solving
community crises than other departments with the organization.
1.3 THE PURPOSE (OBJECTIVE) OF STUDY
The purpose of the study is primarily
to find out:.
(1)
What
problems PHRC and shell have been experiencing with communities when they
operate.
(2)
The
Community Public Relations role or strategies used in resolving the crises.
(3)
The
cause of conflicts and how frequent the conflict occur. And also to know if the strategies used are
fair aid good to host communities.
(4)
The
research work should equal lay emphasis on how to check future problems with
the communities.
1.4 SIGNIFICANCE OF THE STUDY
The frequent crises between PHRC, shell and
her host
communities
have in recent time been on the increase.
This goes a long way to interrupt their operations, thereby revealing
that from 1990 to the end of April 1995, there has been 175 disturbances in
shells host communities while PHRC has only five from the two host
communities. This is outside some of the
hidden vandalizations done to equipment and pipes on shell installations.
This
study is very important to these companies at it will
give
them the idea of solving its community problems/conflicts. It will also help in community public
relations. Other companies can also
benefit from it by looking at how these companies manipulated and solved their
problems with out much damages to their property.
Since
this study is good for a flashback at which public
relations
programme is more profitable, other public relations practitioners can benefit
from it.
Academic
institutions can also make reference to
it help further understanding of the problems and question in some related
study.
1.5 RESEARCH QUESTIONS
The following questions were posed by
the researcher to this respondents from the company and the communities.
1.
Do
PHRC and Shell use public relations strategy to solve community crisis?
2.
Is
community Public Relation strategies effective in community crises management
of these companies?
3.
Do
crisis between shell, PHRC and their
host communities interrupt the company’s operation and also reduce producation
capacity?
4.
Are
PHRC and Shell’s Public Relations departments effective in solving community
crisis?
1.6 RESEARCH HYPOTHESES
The following hypotheses were
formulated to find solutions to the research questions.
Hi PHRC and Shell tend to be experiencing
community crisis more in recent times than in the past.
H0 PHRC and Shell do not tend to
experience community crisis more in recent times than in the past.
H2 In organizations like shell and PHRC,
crisis with their host communities tend to interrupt the company’s operations
and reduce production capacity than any other crisis that the companies are
involved in.
H0
In organization like PHRC and shell,
crisis with their last communities do not interrupt the company’s operation’s
and reduce production capacity than any other crisis that the companies are
involved in.
H3
Shell and PHRC’S public Relations
Departments are more effective in solving community crisis with their last
communities than any other department within the organizations.
H0
Shell and PHRC’S Public Relations
Departments are not more effective in solving community crisis with host
communities than any other department within organization.
1.7 DEFINITION OF TERMS
Some concepts and variables used in
this study have to be properly defined conceptually and operationally
conceptual definitions of the variables or concepts are ordinary literal
meaning while operational definition involve the specification of the data
representation of the concept of variables.
CRISIS
MANAGEMENT
Conceptually:- Crisis management means the techniques of controlling time of
acute danger.
Operationally: It
means the strategies shell and PHRC use in controlling their host communities
in time of acute danger.
Host
Community Conceptually: Host community means a community center
building whose companies carry out their activities.
Operationally:- Host
community means a place whose shell and PHRC (Eleme and Ikwere) carry out the
company’s activities.
PUBLIC
RELATIONS
Conceptually:- Public
Relation is the art and social science of analyzing tends, predicting their
consequences, counseling organization leaders, and implementing planned
programme of action which will serve both the organization’s and the Public
interest.
Operationally :- Public Relations notes to the planned coordinated effort by both
companies aimed at resolving crisis with their host communities.
1.8 ASSUMPTIONS
It is assumed that shell and PHRC have
done everything reasonable to compensate these people by proving social
amenities such as roads, pipe born water, schools, scholarship awards etc.
1.9 SCOPE AND LIMITATION OF THE STDUY
The study will be limited to Okrika
and Ikwerre and Eleme in Bonny all in Rivers State
owing to time and financial constaints.
Every effort will be made to examine
the different strategies used by the Public Affairs Departments of the
Companies in resolving crisis between them and the indigenes of the host
communities.
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