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 gold”.  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 Limited”.  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.

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