COMPLETE SCHOOL PROJECT TOPICS & MATERIALS :
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CHAPTER ONE
BACKGROUND OF THE STUDY
Shell Petroleum Development Corporation Limited (SPDC) is the pioneer and largest hydrocarbon exploration and production company in the country.
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 equal basis. The company was granted an oil exploration license on November 4, 1938.
Shell discovered the first commercial oil field in the country at Oloibiri, Rivers State in 1956 after drilling several unsuccessful wells. Through a sustained exploration effort the company has since discovered more oil fields, which firmly established Nigeria as one of the world’s major crude oil producers.
SPDC has also developed considerable natural gas production for the domestic market and has been appointed technical adviser of a consortium of companies to develop a major liquefied Natural Gas (LNG) export product.
Shell Development Petroleum Nigeria Limited has two operations, the Eastern division with Port Harcourt as the headquarters and the Western division with Warri as the headquarters. The company’s corporate planning office is based in Lagos.
On April 1, 1973, the Federal Government acquired 35% participation in the company’s leases. This was increased to 55% on April 1974, by the government.
On April 1, 1973 NNOC was integrated into Nigeria National Petroleum Corporation (NNPC).
In line with the Nigeria Enterprises Promotion Decree, the Government increased its participation to 60% on July 1979. It also overtook Shell BP’s interest in the then NNPC/Shell-BP joint venture on August 1, 1979, thus bringing its participation to 80% whilst Shell BP had 20%.
Shell changed its name to SPDC on December 13, 1979 and signed an agreement with NNPC on August 22, 1984.
Later in 1989, the Federal Government rationalized its interest in the NNPC/Shell Petroleum Development Company Joint Venture from 80% to 60%, which SPDC’s participation increased to 30%, Elf 10% and Agip Nigeria Ltd acquired 5%.
JOINT VENTURE PARTICIPATION OF FOUR OIL COMPANIES IN 1989
1.1 INTRODUCTION
The emergence of modern communication technology has reduced the world to a global village. It has also facilitated business activities in organizations, which affect the society positively or negatively. Among such organizations are in oil companies, which contribute towards the development and growth of the Gross National Product and also to the gross degradation, pollution and devastation of the environment where these oil companies are located.
In Nigeria, the major oil producing companies are the Nigerian National Petroleum Company (NNPC), Shell Petroleum Development Company (SPDC) Elf and Agip. The communities where these oil companies are located benefit from the companies social responsibility in form of meaningful employment, pro-vision of infrastructure, such as portable water, schools, hospitals, building of schools and award of scholarship. Negatively, the environment of the communities where the oil companies are located are grossly degraded, polluted, deforested leading to the extinction of Agriculture which is the communities means of livelihood to an end.
These communities express their dissatisfaction through protest, vandalism and blockage of oil wells and oil companies’ facilities. These grievances have led to a gap in communication between the oil companies and the communities where the companies are located.
This is where public relations comes in because its function is to plan, organize, maintain and sustain mutual understanding between organizations and its publics.
Public relations is one of the important development in the 20th century. It is recognized and accepted as a useful tool and vital communication link in any organized society. Public relations has also come to be regarded as a potent force in all works of life in our world today. The essence of public relations is that every organization deals with people and the ability to maintain good will, rapport and demonstration of public accountability and social responsibility.
No organization in the oil industry can survive without interacting with different groups of people including the host community where an organization is located. It is this mutual dependence of people in business, government and social organization that has business, government and social organization that has created a new philosophy and function of management called public relations.
It is against this backdrop that many business organizations create public relations departments to take responsibilities of their publics.
The practice of public relations is indispensable in this modern information age where business operations or organization need to establish a two-way information flow to facilitate business activities.
Jefkins (1982:203) stated that public relations like many other disciplines in the social sciences has many definitions, but public relations scholars all over the world agreed on one point; that public relations involves creating a favourable image for an organization or an individual to operate.
Public Relations is a broad and complex activity even though its basic objective and principle of creating and maintaining knowledge and understanding is very simple.
Cutlip et al (1982:16) defined public relations as the deliberate, planned and sustained effort to establish and improve the degree of mutual understanding between an organization or individual and any group of persons or organization, with the primary object of assisting that individual or organization to-deserve, acquire and retain a good reputation.
Offonry (1982:2) maintained that lack of understanding and information can bring about the downfall of government, business enterprises and individual, while essential; information and proper interpretation of plans and programmes can result in public acceptance and goodwill.
Also emphasizing the importance of public relations in an organization, Nwosu (1996:8) stated, that public relations touches on all aspects of the corporation life and operations of every organization from production and personnel to finance and marketing.
Moreover, public relations cannot be divorced from human nature. It pervades all facets of human nature and behaviour. Man being a social animal always look forward to be treated fine and recognized.
Therefore, it can be rightly asserted that public relations is acting in accordance with the dictates of these human desires. Good public relations calls for an appraisal and self-criticism relationship.
The effectiveness of public relations in the oil industry cannot be over- emphasized because oil is a major source of foreign exchange in Nigeria. The oil industry has many publics without which their operations will come to a halt.
These major publics include; government, shareholders, contractors, employees, suppliers, contractors, financial institutions and the communities where they drill crude oil.
The communities of the oil company are the major problem of the energy sector because of how their operations affect these communities in form of deforestation, pollution of land and water, oil spoilage and gas-flaring.
Shell Bulletin, (1996:2) stated that the drilling of crude oil in Nigeria is a joint venture between the Federal Government who has over 50% stake holding and some oil companies.
This study is focused on the operations of SPDC and some of its host communities using Oloibiri, Nembe and Bonny as case study.
SPDC has witnessed several disruptions and disturbances in its operations from it host communities because the health and environmental hazards posed by the operations of SPDC in their locality.
The community members have made protest, sabotage SPDC’s operations all in the bid of expressing their dissatisfaction over the negligence of their polluted environment which exposes them to hazards.
For instance, Oloibiri community claims that SPDC has tapped the natural resources in their land without commensurate compensation and negligence of their social responsibility to the community. This type of stray relationship calls for the effectiveness use of public relations on the part of SPDC in order to maintain mutual understanding, harmony and trust among the members of the community.
On the other hand, SPDC maintain that they carry out their social responsibility and that the full development of a community lies on the government since SPDC pay tax to the government.
This study, therefore, is to assess the impact of public relations efforts in maintaining a harmonious relationship between SPDC and Oloibiri community.
1.2 STATEMENT OF PROBLEM
The objective of public relations in any organization is to maintain mutual relationship and harmonious environment among the organization’s various publics.
Public relations as a management function is used in planning, implementing, monitoring and evaluating of any programme of activity in order to provide the mutual interest of organization and its various publics.
Shell Petroleum Development Corporation (SPDC), practice public relations in relating to its host communities but the management observed that most often the host communities are hostile to SPDC’s public relations programmes.
The management of SPDC is convinced of its good community relation’s programme but the persistent hostilities from the host communities’ show that there is a strain relationship between SPDC and its host communities. Many factors could be at play here especially the public relations practices of the SPDC involving the nature, tool and the objectives of public relations in the host communities.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study are as follows:
- To examine the effectives of media of communication through which public relations practices are carried out.
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To highlight public relation practices of the company in the host communities.
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To determine how ‘ public relations can be used for effective information management and improvement of mutual relationship between the companies and host communities.
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To find out the problems of SPDC host communities and the channels of disseminating information to them.
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To show how social responsibility of the company helps to achieve the objectives of public relations in host communities.
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To reveal the satisfaction or dissatisfaction of the host communities over the SPDC’s performance of its social responsibility.
1.4 SIGNIFICANCE OF THE STUDY
The consequence of this study in the life of any oil company (drilling) operating in Nigeria is that the findings will enable recommendations to be proffered to redesign major public relations programmes.
More importantly, it may cause the company to redirect its public relations to a better practice having the interest of the host communities at heart. This study, generally, will be of immense benefits to researchers on the respective study concerning oil companies.
This study will not hesitate to provide an in-depth understanding of the need to formulate sound public relations policy.