The Effects of Oil Joint Venture Partnerships on Enforcement of Zero-Gas Flaring Policy in Nigeria

The Effects of Oil Joint Venture Partnerships on Enforcement of Zero-Gas Flaring Policy in Nigeria.

INTRODUCTION

Oil is the mainstay of the Nigerian economy such that the national budget is benchmarked on the price of oil in the international market and quantity of oil to be produced and exported. The fact that Nigerian budget is based on the expected revenue from oil demonstrates the importance of oil to Nigerian economy.

Currently, Nigeria with over 35 billion barrels of oil reserve is ranked the eleventh largest oil producing country in the whole world and second in Africa at an average of 2.3 million barrels of crude oil per day as well as the eighth largest exporter globally at an average of 2 million barrels per day (OPEC, 2012).

Thus, oil sector alone constitutes nearly 90 percent of the total revenue and foreign exchange earnings in Nigeria since the 1970s. However, oil has not always been the mainstay of Nigerian economy.

Prior to the discovering of oil in commercial quantity in 1956 in Oloibiri now in Bayelsa State, agriculture was the mainstay of Nigerian economy.

Even with the production of oil in 1958 onwards Nigerian economy remained agrarian until 1970 when with the rising production and exportation, oil replaced agriculture as the mainstay of Nigerian economy (Ikejiani-Clark, 1995; Mahler, 2010).

Objectives of the Study

This study has broad and specific objectives. The broad objective is to examine the effects of oil joint venture partnerships on the enforcement of zero-gas flaring in Nigeria. Whilst the specific objectives of this study were to:

Determine whether equity arrangements of the oil joint operation agreements hindered the implementation of zero-gas flaring policy in Nigeria;

ascertain whether the budgeting process of the oil joint venture operations impeded the adoption of effective gas flare elimination strategies in Nigeria; and

establish whether funding of NNPC’s participation in oil joint venture partnerships constrained financing of associated gas utilization facilities in Nigeria.

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