Oil & Gas Supply Chain Management in Nigeria

This assignment analyzes the supply chain management practices of three major oil and gas companies operating in Nigeria: Royal Dutch Shell, Chevron Nigeria Limited, and Exxon Mobil. The research utilizes secondary data from company reports, including production data, financial records, CSR reports, and supply chain analyses. The study compares their operations, identifies challenges and best practices, and offers recommendations for enhancing supply chain efficiency and sustainability within the Nigerian oil & gas sector.

Running head: AN ANALYSIS OF SUPPLY CHAIN ACTIVITIES IN NIGERIA
DOWNSTREAM OIL AND GAS INDUSTRY
An analysis of supply chain activities in Nigeria Downstream Oil and Gas Industry
Name of the Student:
Name of the University:

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Abstract
The oil and gas industry is being concerned of global supply chain which consists of domestic as
well as worldwide transportation in addition to inventory visibility, handling of raw materials,
and import in addition to export facilitation along with the information technology. This selected
industry offers of supply chain model to implement of techniques related to the supply chain
management. Within its supply chain, the company is associated to the upstream as well as
downstream distributors through the “supply chain management (SCM)”. The paper discusses of
the SCM activities into the downstream sector of the oil as well as gas industry. There are supply
chain issues which are identified and strategies to examine and improve over the supply chain
issues. Finally, three of the case studies such as Royal Dutch Shell, Chevron Nigeria Limited and
Exxon Mobil are introduced to develop the logistics for the supply chain into the oil as well as
gas industry which can improve efficiency along with bottom line. Research methodologies used
in this research study are conduct of the research by using of the secondary data analysis method.
The data are composed from the articles and websites of the reports of company of selected
Nigeria’s oil and gas industry.
Keywords: Supply chain management, downstream sector, supply chain model.

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Acknowledgement
The research is conducted to enrich the experience of my life. The research enhances my
knowledge and skills on the selected research topic. With gaining of the knowledge, it gives me
opportunity to face some challenges and overcome them. Without the guidance of my professors,
friends and family, I would not able to complete the study. They all contribute me to enhance my
knowledge on the research topic. I would also like to thank my supervisor -------------- for
providing me constant support and guidance during the entire research process. Without all their
help, I am not able to collect secondary data and valuable resources. It also provides us valuable
results for the project work. All their support inspires and enlightens me to go through the
research process.
Heartfelt thanks and warmest wishes,
Yours Sincerely,

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Table of Contents
Chapter 1: Introduction....................................................................................................................8
1.1 Background of the supply chain in oil and gas industry........................................................8
1.1.1 Overview of the oil and gas industry in Nigeria.............................................................8
1.1.2 Supply chain management (SCM) in oil and gas industry.............................................9
1.2 Relevance of the research topic...........................................................................................10
1.3 Purpose of the research study..............................................................................................10
1.4 Research aim and objectives................................................................................................11
1.4.1 Research aim.................................................................................................................11
1.4.2 Research objectives......................................................................................................11
1.5 Research questions...............................................................................................................12
1.6 Problem statement...............................................................................................................12
1.7 Research outline...................................................................................................................13
1.8 Summary..............................................................................................................................14
Chapter 2: Literature Review........................................................................................................15
2.1 Introduction..........................................................................................................................15
2.2 Supply chain framework in oil and gas industry.................................................................15
2.3 Supply chain management...................................................................................................17
2.3.1 Supply chain management in Nigeria oil and gas industry..........................................17

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2.3.2 Downstream oil and gas sector of Nigeria....................................................................18
2.4 Challenges in oil and gas supply chain................................................................................19
2.5 Supply chain strategies in oil and gas industry....................................................................20
2.6 Summary..............................................................................................................................22
Chapter 3: Research Methodology................................................................................................23
3.1 Introduction..........................................................................................................................23
3.2 Method outline.....................................................................................................................23
3.3 Research philosophy............................................................................................................25
3.3.1 Justification for selection of chosen philosophy...........................................................26
3.4 Research approach...............................................................................................................26
3.4.1 Justification for selection of chosen approach..............................................................27
3.5 Research design...................................................................................................................27
3.5.1 Justification for selection of chosen design..................................................................28
3.6 Data collection procedure....................................................................................................29
3.6.1 Data sources..................................................................................................................29
3.6.2 Data techniques.............................................................................................................29
3.7 Ethical considerations..........................................................................................................30
3.8 Research limitations.............................................................................................................31
3.9 Time horizons......................................................................................................................31
3.10 Summary............................................................................................................................33

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Chapter 4: Research Data..............................................................................................................34
4.1 Introduction..........................................................................................................................34
4.2 Nigeria crude oil production................................................................................................34
4.3 Distribution of GDP across economic sectors from 2010-2016 in Nigeria.........................36
4.4 Natural gas production in Nigeria........................................................................................37
4.5 Case study analysis..............................................................................................................39
4.5.1 Chevron Nigeria Limited case......................................................................................39
4.5.2 Exxon Mobil case.........................................................................................................40
4.5.3 Royal Dutch Shell case.................................................................................................41
4.6 Summary..............................................................................................................................42
Chapter 5: Discussion....................................................................................................................43
Chapter 6: Conclusion and Recommendations..............................................................................49
6.1 Conclusion...........................................................................................................................49
6.2 Linking with objectives.......................................................................................................49
6.3 Recommendations................................................................................................................51
6.4 Limitations of the study.......................................................................................................51
6.5 Future scope of the study.....................................................................................................52
References......................................................................................................................................53
Appendix........................................................................................................................................58
Reflection...................................................................................................................................58

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Table of Figures
Figure 1: Supply chain framework in oil and gas industry............................................................16
Figure 2: Supply chain in oil and gas industry..............................................................................18
Figure 3.1: Types of Research Philosophies..................................................................................25
Figure 3.2: Types of Research Approach......................................................................................27
Figure 3.3: Types of Research Design...........................................................................................28
Figure 4.1: Nigeria crude oil production.......................................................................................35
Figure 4.2: Distribution of GDP across economic sectors from 2010-2016.................................36
Figure 4.3: Natural gas production in Nigeria...............................................................................38

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Table of Tables
Table 1: Gantt chart.......................................................................................................................32
Table 4.1: Nigeria crude oil production.........................................................................................34
Table 4.2: Distribution of GDP across economic sectors from 2010-2016...................................36
Table 4.3: Natural gas production in Nigeria................................................................................37
Table 4.4: Oil and gas reserves and production of Chevron Nigeria Limited...............................40
Table 4.5: Oil and gas reserves and production of Exxon Mobil..................................................41
Table 4.6: Oil and gas reserves and production of Shell Nigeria..................................................42
Table 5.1: Three biggest oil and gas players.................................................................................44

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Chapter 1: Introduction
The research paper titled “An analysis of supply chain activities in Nigeria Downstream
Oil and Gas Industry” is aimed to study the supply chain development into the selected industry
along with operational challenges and environmental risk concerns. This chapter presents the
introduction of theoretical context, aims in addition to objectives of the study followed by
research questions. In order to comprehend the research aim, objectives, the research background
is provided on SCM of oil as well as gas industry. All the discussions of the selected topic are
based on literature review, analysis of peer review articles on supply chain activities and online
journals. The key significant outcome of this research is to view on SCM and disclose of
challenges into the oil as well as gas industry in Nigeria.
1.1 Background of the supply chain in oil and gas industry
1.1.1 Overview of the oil and gas industry in Nigeria
The oil and gas industry of Nigeria is vigorous since the discovery of the crude oil in the
year 1956 by Shell Group. Nigeria consists of natural resources such as hydrocarbon, it is 10st
largest manufacturer of oil in the whole world and 3rd largest within Africa. The revenue of oil
accounts for 95 percent of foreign exchange earnings within Nigeria. The oil production is
fluctuated in response to supply of oil (Blog.kpmgafrica.com, 2014). The oil and gas industry
involved into three steps: upstream, midstream as well as downstream. This particular thesis
analyses the supply chain activities into the downstream sector. The key sections within the
downstream sector are communication, transportation, refining and distribution (Raut, Narkhede
and Gardas, 2017). Under communication and transportation, it involves with the transport of oil,

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gas to refinery next to with gas stations. There is pipeline network from wellhead to refinery in
addition to for these point tankers are used. Nigeria consists of four refineries: two of them
situated at Port Harcourt and other two each in Warri and Kaduna. The oil and gas products
within Nigeria are being supplied throughout “Petroleum Product Marketing Company’s pipeline
system” that links with refineries to 21 storage depots (Awogbade, Bamgbose and Izekor, 2017).
There is import of refined products from outside of the Nigeria in order to meet with the
customer’s demands.
1.1.2 Supply chain management (SCM) in oil and gas industry
The oil and gas industry is one of the majority important sectors of the economy which
occupied into oil production, shipping, trade of the mineral resources in addition to storage. The
downstream sector is based refining of the petroleum crude oil, processing of the natural gases
and division of the products derived from the oil and natural gases. Supply chain system is used
to supply of oil unpurified oil from production location for refining and distributing the products
to the retailers. Ambituuni, Amezaga and Emeseh (2014) mentioned that supply chain within
selected industry is required element for national economics plus international relationships in
Nigeria. The industry has greater impact on the global finances tendency and show increasing
demand in recent years.
Ngoasong et al., (2014) argued that SCM in oil as well as gas industry consists of a
variety of challenges into the logistics area. Those challenges have major influences into selected
industry. Into the area of logistics, opportunities for cost savings are still existed. Gulen (2016)
mentioned that supply chain system benefited the oil and gas industry by improving their
performance by 80 percent based on their supply chain needs. There are benefits of superior
control over the quality of product, proper coordination of operations into value chain, contact to

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superior technologies along with intelligence of strategic importance. It also improves the
product along with material flow by timely delivery of good to the customers. It enables to
improve product flow by proper demand in addition to sales forecasting. The challenges of oil
shortages are resulted to this study, to disclose the challenges which affect performance of
supply chain system within selected industry in Nigeria (Ahmad et al., 2016). The purpose of the
supply chain is to make of best customer values at lower operating cost; hence addition of supply
chain flows to meet with consumer’s demands. The demands are from supply of war materials to
deliverance of oil products to the trade.
1.2 Relevance of the research topic
Into the global supply chain, oil as well as gas industry includes of supply activities such
as international transportation, ordering as well as inventory, handling of the materials,
facilitation of import and export along with information technology. The industry is offering of
classic models to implement of supply chain techniques. This selected topic is relevant as it
investigates of role of SCM into the oil as well as gas industry. Improvement over the supply
chain logistics into oil as well as gas can improve its efficiency along with bottom line.
1.3 Purpose of the research study
With rising pace of the worldwide integration it is required that supply chain into oil and
gas industry competes into the global markets. The purpose of this study is to focus on different
supply chain issues of downstream oil industry in Nigeria. The oil and gas sector faces of
challenges such as non-availability of the oil as well as gas resources, while put the reserves into
production and delivery of final products. Supply chain management programs are used to
enhance the organizational goal. Improvement over the quality of logistics system and reduction

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of cost results in improving the use of information technology results into providing solutions
into supply chain sector.
1.4 Research aim and objectives
1.4.1 Research aim
The research aim is to investigate and analyze the supply chain activities of Nigeria
downstream oil as well as gas sector. It also suggests over improvement into the supply chain
management of oil and gas industry. The industry makes an importance contribution to the
global demand of energy and economic growth. Due to varying prices of oil, it affects the
operational activities of the industry which results into linkage of supply chain through the entire
industry. The supply chain challenges which impact the performance of oil industry are
identified. In context of selected industry, the managers are required strategic data along with
integrated process management system in the supply chain for improving the performance. The
research elaborates case studies of major players in oil and gas industry in respect to supply
chain activities. The entire research study is focused on past along with current supply chain
practices. This research study attempts to bridge gaps between the organizational theories and
supply chain management field.
1.4.2 Research objectives
The research objectives which are formulated based on above research aims are:
 To discuss the supply chain activities of Nigeria downstream oil and gas industry
 To analyze and review of current supply chain strategies in Nigeria’s oil and gas industry
 To identify the challenges in supply chain of downstream sector of Nigeria’s oil and gas
industry

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 To find out good framework for Nigeria’s oil and gas supply sector
1.5 Research questions
Following are the research questions for this particular research study:
1. What is the supply chain framework for oil and gas supply sector of Nigeria?
2. What are possible supply chain activities in Nigerian downstream sector?
3. What are the possible supply chain challenges in Nigerian downstream oil and gas
industry?
4. How the supply chain strategies are used to improve the operational performance of
selected industry?
1.6 Problem statement
It is not difficulty to approach up with selected research topic, but the problem is to
discover of efficient in addition to precise information of supply chain challenges into Nigerian
oil as well as gas industry. Working with this challenge is well as highly trusted sources and
articles provide with various information. None of the target company is chosen as case
company, but few of major companies are representing as examples to offer detailed description
on supply chain activities in downstream sector. As it is indicated that the study is based on peer
reviewed, therefore some of the sources highlight lack of supply chain approaches into selected
industry but it provides interest to develop supply chain activities. There is some wide literature
which provides in-depth information on technical as well as economical aspects of downstream
supply chain.

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1.7 Research outline
Following is the outline of the research study which the researcher follows to conduct this
thesis paper:
Chapter 1: The first chapter provides introduction on the selected research topic.
Research aims, objectives and questions of the research are presented. This chapter also provides
with background of the research, research purpose and relevance of selected topic and summary
are adopted.
Chapter 2: The second chapter is literature review provides background of oil and gas
industry along with its significance into the global economy. It investigates why such supply
chain context is chosen for this research study. Along with the background, it highlights the
supply of proved oil and gas reserves in Nigeria downstream sector. The key downstream supply
chain challenges are discussed in this chapter.
Chapter 3: The third chapter presents a discussion on the research methodology. The
selected research methodology for this research is secondary data collection method. The data
are collected from peer reviewed journal articles on oil and gas industry of Nigeria to identify
their supply chain activities. There are number of scholarly articles for doing systematic review
of this research study.
Chapter 4: The fourth chapter presents the result of the data analysis which is approved
out below the research study. It includes of data collection and directed for the descriptive
analysis. It also gives argument on validity of the data.

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Chapter 5: The fifth chapter discusses the results, highlights the findings and theories
used in the data analysis. It provides the outcomes of research analysis.
Chapter 6: The sixth chapter provides the research limitations along with
recommendations towards direction for future study in selected research topic.
1.8 Summary
From this chapter, it is summarized that there are some supply chain challenges into
selected industry which are required to be improved. This study also identifies of best supply
chain practices and factors for successful operations of their oil and gas business. The entire
study is based on past and existing practices of supply chain activities of mainly Nigerian some
of the big oil as well as gas companies. The information and data are based on various literature
sources. The study is developed based on the research objectives for progressing the current
understanding of operational performance into supply chain. Improvements are also suggested
based on identified challenges related to the supply chain in oil as well as gas industry of
Nigeria.

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Chapter 2: Literature Review
2.1 Introduction
This chapter discusses the role of supply chain management into the oil as well as gas
industry with analyzing the challenges into the supply chain activities. After identification of the
challenges, strategies are provided to overcome with the issues into supply chain. The systematic
literature review identified theoretical approaches used to examine the supply chain activities.
The supply concept into the oil and gas industry is a customer oriented approach (Inkpen and
Ramaswamy, 2017). The data are gathered from the peer reviewed articles focused on the aspect
of supply chain. Oil plays a key significant role into the development of Nigeria. Into this
particular sector, supply chain is accounted for 70 percent of the overall cost. The goal of supply
chain into the oil and gas industry is to reduce the purchase of materials, maximize the
production of oil and meet with demand of sales number (Micheli et al., 2016). The aim of
production units is to maximize the performance as well as margin.
2.2 Supply chain framework in oil and gas industry
This section represents the supply chain framework of this particular research study. The
discussion is based on positioning of the framework with broader context of SCM. First, the
researcher describes the oil and gas supply chain in Nigeria and then reviews the literature
related to the selected industry. It is followed by discussion on theoretical framework. The
supply chain theories are suggested that the chain is used to manage from end-to-end. Urciuoli et
al., (2014) suggested that more studies are required to understand the contextual factors of the
SCM relevant to the oil and gas industry. Due to global as well as strategic nature of the supply

16
Supply
chain goals
Commitment to the
supply chain
challenges
Management
preparedness
Supply chain
strategies
External
factors
Economic
and political
stability,
energy
transitions
and
regulations
Organizational
environment
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chain activities, it will influence the achievement of the sustainable future towards oil as well as
gas industry. The factors which are categorized into the external factors are business
environment along with internal factors consist of organizational as well as supply chain
functions. This framework proposed from the existing theory of the supply chain into different
aspects. Yusuf et al., (2014) argued that the first aspect is to provide conceptualization of both
internal as well as external factors determine the adoption of supply chain into the oil and gas
industry. Various studies are conducted to examine the external drivers of SCM limited the
understanding of impact of economic condition and regulatory environment into supply chain.
Singh (2015) mentioned that the second aspect is that the oil as well as gas is such an industry
faces of sustainability pressure from the external environment.
Figure 1: Supply chain framework in oil and gas industry
(Source: Created by author)
Business environment

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2.3 Supply chain management
Various authors have defined SCM from various perspectives and point of views. Inkpen
and Ramaswamy (2017) stated that SCM defined to provide of maximum customer services at
lower cost. Within the supply chain, the industry links to the supplier’s upstream as well as
distributor’s downstream to serve their customers. Okoroma et al., (2015) defined SCM as art
and science which involves integrating and flowing of components into the supply chain such as
financial assets, capital, technology and other resources. This section will represent the supply
chain management into the oil as well as gas industry and downstream oil and gas sector of
Nigeria. Gulen (2016) mentioned that SCM is focused on managing and examining of supply
chain to gain of better cost savings and provide of better customer services.
2.3.1 Supply chain management in Nigeria oil and gas industry
Val et al., (2016) mentioned that oil as well as gas industry plays a key significant role
into the economic development of Nigeria. Performance of its supply chain is considered as key
importance of the industry. Nigeria consists of lowest cost crude oil producer along with the
international price of oil fixed in US dollars. The economy of Nigeria faces a melt down with the
drop into the price of oil. Transportation, warehousing in addition to border clearance cost form
critical component of the price of commodities. Modarress, Ansari and Thies (2016) found that
Nigeria oil as well as gas companies implement of SCM throughout use of energy saving devices
such as equipment for consumption of lower energy, sensor, reducing of air pollution, health and
safety standards and use of recycled materials.

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Figure 2: Supply chain in oil and gas industry
(Source: Inkpen and Ramaswamy, 2017, pp-67)
2.3.2 Downstream oil and gas sector of Nigeria
Both upstream and downstream activities are important activities into the oil as well as
gas industry. This section is analyzed the downstream sector processes which is defined as the
operations to refine the petroleum crude oil as well as process and purify the raw natural gases
along with distribution of the products derived from crude oil (Ambituuni, Amezaga and
Emeseh, 2014). Into the refining process, the first stage is based on demand forecasting as well
as trigger of procurement along with logistics activities to supply of crude oil to deliver the
products and services to the customers. Agyemang, Zhu and Tian (2016) discussed that refining
is a process involves with change of crude oil into a variety of types of derivatives focused on the
demand forecasting. Logistics management provides of right products to be delivered to the right
customers at right time in cost effective way. The downstream sector of Nigeria handles of
processing, marketing, production as well as distribution into the oil and gas market. Due to fall

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in the oil price in the year 2015, the buying power of the raw material is increased (Tob-Ogu,
Kumar and Cullen, 2017). Accessibility of low price of crude oil has facilitated vast profits for
the oil companies by selling of developed products to the industries. Eneh (2016) argued that
when the price of oil continued to carry on beyond the period, because of oversupply, higher
inventory and slow growth of demand from the other countries, it results into pressure on margin
made by the downstream sector of oil as well as gas.
2.4 Challenges in oil and gas supply chain
Ogunlowo, Bristow and Sohail (2017) described how the supply chain into oil as well as
gas industry are become complex as compared to other industries. Production to refineries of
crude oil is a long journey. The process of refinery is a complex process as part of the supply
chain. In some of geographical areas of Nigeria, there is an increase in demand of fuel becomes
low. Trade into the goods has increased due to potential lack of refining into the consumption
areas. Ovadia (2014) stated that it creates pressure on the margin into the regions with deficit as
the finished products are begun to arise from the regions with surplus. It also creates of new
marketplace in additional countries for the local refiners to enlarge competence into the complete
supply chain. Bridge and Bradshaw (2017) argued that quality is also an issue which requires of
more complex investment into the processing equipments. The environmental regulations are
severe, makes the operations of existing facilities costly and complex. Following are the
challenges into the supply chain of oil as well as gas industry:
Logistics challenges: Into the oil as well as gas industry, logistics network is highly
inflexible that arises from the production capabilities of the suppliers of crude oil, lead time of
transportation an limitations of the transportation (Sumbal et al., 2017). Therefore, the logistics

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network becomes a challenge. Due to long distance between the supply chain partners and
transportation, there is increase in transportation cost and in-transit inventory. Ogunlowo,
Bristow and Sohail (2017) concluded that there is also an increase into inventory carrying cost
based on safety stocks at final location of customer. The process of transportation is carried out
either by means of ship, truck and others. Swaray and Salisu (2017) illustrated that there are
some constraints into the transportation mode includes of long lead time from the point of
shipping towards location of the customers.
Integrated process management challenge: The process from delivery of raw materials
to delivery of final product is critical towards success of the company. The oil as well as gas
industry are lagging behind the use of integrated planning across their supply chain (Amu and
Ozuru, 2014). This challenge results into increase of cost to acquire of crude oil which affects the
price of gas for the customers.
Information system challenge: Due to globalization into the supply chain network, it
affects the use of information system to develop the production and distribution of products in
the oil industry. This industry is lack behind the use of information technology for their supply
chain operations. Bridge and Bradshaw (2017) demonstrated that due to security requirement,
information system is needed into the industry. Oil companies are shipping of hazardous
products and supply chain partners should aware of the location where the products are to be
shipped. Wireless technology is used to track the shipments of the products.
2.5 Supply chain strategies in oil and gas industry
In today’s time, oil as well as gas industry is looking for new supply chain strategies to
reduce the operating cost and improve their efficiency along with industry’s profits. In some of

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the cases, technology allows to configure across the supply chain management (Agyemang, Zhu
and Tian, 2016). As an improvement into the supply chain, the industry should review of the
supply chain configuration as well as coordination system. As the oil field of Nigeria is
maturing, the Nigerian government is focused on enhancing the output from the existing fields
and offshore development of oil as well as gas industry. Ahmad et al., (2016) argued that the
SCM into the industry needs the company to integrate of their decisions which are made in the
customer’s chain as well as suppliers. Following are the strategies used to improve the supply
chain into the selected industry:
Customer segmentation: In order to meet with the customer’s requirements, various
approaches are required for the supply chain configuration. The foundation of this segmentation
is data driven analysis provides the information required to tailor the supply chain policies to
raise the profitability of the industry (Okoroma et al., 2015).
Customization of logistics network: Within the supply chain, logistics is most important
part. Based on the customer’s demands, the goods and services are delivered to them to deliver
of accurate quantities and on time. Improvement over the supply chain means customization of
logistics network (Modarress, Ansari and Thies, 2016). The overall logistics network into oil and
gas industry is strengthen when the driller, production engineer, financial analyst are to evaluate
technical as well as economic feasibility of development of oil.
Form of partnerships: Oil as well as gas industry involved in the supply chain consists
of domestics as well as international transportation, material handling, information technology
and facilitation of import and export (Micheli et al., 2016). The partnership with other oil and gas

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company helps to deliver the required customer’s products and services easily. It helps the
industry to perform their supply chain and transportation process effectively.
Outsourcing: The outsourced offshore of both finance as well as accounting processes is
an aspect of the business which benefited the operating cost to the oil in addition to gas
industries. The driving force of oil as well as gas industries into the offshore finance also
accounting functions as a cost reduction (Yusuf et al., 2014). There is 30-50 reduction of cost is
reported by the Nigerian oil companies to calculate of offshore gains. Technology
implementation is being implemented by the oil as well as gas companies to allow for outsource
provider to fulfill the tasks reduced the operating cost and allowed to maintain of high focus on
the core competencies.
2.6 Summary
Most effective supply chain practices into the oil as well as gas industry represent of
factors to maintain the suppliers of the crude oil, reduction of the lead time and lower the
production along with distribution cost. Due to inflexibility involved into the oil as well as gas
industry, logistics becomes a key challenge. Apart from the challenges of supply chain, there are
opportunities to improve supply chain and cost savings. It leads to the logistics functions;
therefore improvement over the logistics network makes the supply chain more efficient and
effective. The oil industry takes outsourcing as their supply chain strategy to collaborate with the
competitors and provide a supply chain solution. Collaboration among the competitors offers the
companies with cost savings and introduce of new opportunities. It is analyzed that global
demand of the oil provides to reach the customer’s demand and increase into industry’s market

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share. SCM is being focused to manage as well as examine of supply chain for gaining of cost
savings to provide better services to the customers.
Chapter 3: Research Methodology
3.1 Introduction
Mackey and Gass (2015) stated that research methodology is defined as systematic way
to provide solutions to the research problems. It is a science to study how the research is being
carried out. Taylor, Bogdan and DeVault (2015) argued that the research methods are different
procedures by which the researchers carried out the research to describe, explain and predict
phenomenon. Glesne (2015) defined it as the revise of methods by which the research
information is gained and plan to provide work plan of the research. The researcher has tried to
apply of detailed process of the research methodology which helps in better analysis of supply
chain activities in Nigeria downstream oil and gas industry.
3.2 Method outline
In this chapter, detailed research techniques are used to examine the supply chain
activities and its consequence on the oil and gas industry. Selected philosophy of this research
study is positivism which helps to gain of information based on selected research topic.
Deductive approach is used to permit the researcher to carry out this study based on the
secondary sources which assist in considering the supply chain activities in a better way.
Descriptive research design is used to help the researcher define the applied concepts in detailed
way to help in describing the impact of the study. Application of the secondary sources such as

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internet, journals, books help in providing detailed information of selected research topic along
with providing better quality of research analysis. Qualitative data is used as data techniques help
to record description form of data which include of better explanation of the selected topic.

25
Research Philosophy
Positivism Realism Interpretivism
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3.3 Research philosophy
Flick (2015) demonstrated that research philosophy is connected to expansion of the
knowledge as well as scenery of the knowledge. Adoption of proper research philosophy helps to
make assumptions which allow understanding of the selected research topic. Cleary, Horsfall and
Hayter (2014) discussed that there are three types of research philosophy such as positivism,
interpretivism and realism. Positivism helps in analyzing of the hidden information on the supply
chain activities into oil as well as gas industry in methodical manner (Silverman, 2016).
Interpretivism supports concept of the complex structure involved into the management
activities. Vaioleti (2016) described that this research study aim to identify things with the ideas
of natural law to positive degree rejects scientific approach. Finally, realism is mixed approach
of positivism as well as interpretative which involves features with both the philosophies.
Figure 3.1: Types of Research Philosophies
(Source: Cleary, Horsfall and Hayter, 2014, pp-474)

26
Research Approach
Inductive Approach Deductive Approach
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3.3.1 Justification for selection of chosen philosophy
In this particular research study, positivism research philosophy is used to better analysis
of hidden facts as well as information related to the supply chain activities into oil industry.
Apart from all this, this study is very time limited; therefore realism study is discarded as chosen
philosophy. Selection of the positivism philosophy limits the role of researcher to evaluate the
data that leads to reduction of data errors.
3.4 Research approach
The approach which is applicable to the research study is aimed to provide inputs into the
supply chain activities into the oil as well as gas industry. The selected research topic is
undertaken for the study using two approaches such as deductive and inductive. Panneerselvam
(2014) discussed that inductive approach helps to study research topic when there is lack of
availability of data. This approach uses of observation to gain of relevant data and builds the
research path. Tarone, Gass and Cohen (2013) noted that this approach serves the purpose of use
of new theory into the research study. On other hand, deductive approach is described as realistic
application of theories to increase right to use to the contented of chosen research paper. It aims
to construct of theory with comprehensive information in addition to ideas of the data analysis.

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Figure 3.2: Types of Research Approach
(Source: Tuohy et al., 2013, pp-19)
3.4.1 Justification for selection of chosen approach
In this particular study, deductive research approach is selected as the research topic tries
to study concepts of the supply chain activities into oil industry with help of different theoretical
knowledge. Models of the supply chain are required to be selected which helps to better
understand of the research into precise as well as clear manner. Inductive approach is failed to
implement into the study as the researcher is not implementing of new concepts and theories of
supply chain to conduct the study. Therefore, selected research approach is better to understand
the concepts into descriptive way.
3.5 Research design
Matthews and Ross (2014) illustrated that research design helps to make clear framework
of the selected research topic assists in better collection and analysis of collected data. At the
time of collecting of data, research design is applied to provide better description of the research
topic. There are three types of research design such as exploratory, explanatory and descriptive.
Best and Kahn (2016) demonstrated that exploratory design helps to acknowledge of different
kinds of ideas required to complete the study. Explanatory research design helps to understand
occurrences of the events and effects of happening. Finally, descriptive research design aims to
gain detailed analysis to state occurrence with proper description of the research topic.

28
Research Design
Exploratory Explanatory Descriptive
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Figure 3.3: Types of Research Design
(Source: Kiyimba and O’Reilly, 2016, pp-471)
3.5.1 Justification for selection of chosen design
In this particular study, descriptive research design is used to describe detailed process
concerned into analyzing of supply chain activities into Nigeria oil and gas industry. The extent
of the supply chain activities into selected industry is rightly analyzes with helps of this research
design. Descriptive research is such as study designed to depict the participants into proper way.
It is one of the study in which the information are collected without changing of the
environment. Descriptive research refers to the type of the research questions, research design as
well as data analysis which is applied to the provided research topic. Descriptive analysis
generates of the data such as qualitative and quantitative which describe the condition of nature
at the end into time. It is used to get information that is concerning the status of the research
phenomenon with respect to the conditions of the situation.

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3.6 Data collection procedure
Sekaran and Bougie (2016) mentioned that data collection procedures are helpful to
derive proper results towards the research process along with facilitates standard plan of the
research work. Under the data collection procedures, there are data sources and data techniques
to collect of information helpful to study the selected research topic.
3.6.1 Data sources
The sources of data are useful to penetrate the research topic and help to take out
information focused on the research necessities. There are two types of data sources such as
primary and secondary data sources. Zikmund et al., (2013) illustrated that primary sources are
collect raw data based on selected research topic. The sources of primary research are survey,
interview. On the other hand, secondary data sources provide with widen thought of the research
topic which enables of improved study of selected research topic as it consists of more data
furthermore detailed description (Bernard, 2017). The sources of secondary research are internet,
journals and books. In this particular study, secondary sources are used and the data are collected
from the journal articles based on the supply chain activities of Nigeria’s downstream oil as well
as gas industry. The secondary data are collected from a variety of case studies of major players
in oil and gas industry in respect to supply chain activities in Nigeria. The sources are second
hand data that are already appeared into the primary documents.
3.6.2 Data techniques
There are two types of data techniques such as qualitative and quantitative. Quantitative
data applies of the statistical data which helps to record of data with larger sample sizes. Smith
(2015) described that qualitative research is emphasized the constructed nature of the reality,

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relationship among the researcher and what is being studied. This data technique is not focused
on the prescribed methods as well as hypothesis that would guide the researcher to conduct the
entire study (Hair, 2015). This technique involves direct come upon with the world. In this
research study, qualitative data technique is used as common concepts into the process to gather
information is grouped together and make a new phenomenon for further research studies.
3.7 Ethical considerations
While conducting and working into the research study, the researcher are required to
follow code of conduct which help to identify wrong as well as right set of behaviors needed to
adopt during the research process. The researcher analyzed the supply chain activities within the
oil sector and tried to follow some ethical considerations which help to add standardization into
the study.
Data application: Any type of commercial data application is avoided such that the
findings can limit to the academic purposes.
Involvement of the participants: The researcher are tried to put in no exterior
influences on pressure over the participants to get part into the process of feedback of the
research topic. The participants are encouraged to participate into the research study.
Participant’s anonymity: The researcher ensured that no mental and physical
harassment are given to the participants so that identities of them are hidden as per their requests.
Based on the mentioned ethical considerations, the researcher are tried to continue of
investigation ethics in the study. When all the mentioned ethical considerations are followed, it
results into successful completion of the research study within estimated time.

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3.8 Research limitations
Blumberg, Cooper and Schindler (2014) commented that the limitations into the research
topic are natural which defines the restricted area and scope of the research study. Following are
the research limitations:
Reliability: The participants those are not involved into the study are not involved into
any type of influences.
Time constraint: The researcher had limited instance to lead the study within a little
time period. Detailed research and analysis is not conducted due to cross sectional study.
Budget constraint: In the limited budget, the researcher has lack of finance to do the
analysis using SPSS software which could better enhance the quality of the data analysis and
research outcomes.
3.9 Time horizons
The research study is cross sectional in nature, therefore there is limited time to study on
the selected research topic. As this type of study is adopted has limited time, therefore Gantt
chart is used as the best scheduling tool to identify the completion time with its respective
research activities. The total duration of the entire research study is 7 weeks. The researcher is
functioned of the Gantt chart at steady intervals such that the status per usual intervals is
analyzed properly.

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Main activities/ stages Week
1
Week
2
Week
3
Week
4
Week
5
Week
6
Week
7
Selecting a research topic 
Data collection using the secondary
data sources
 
Creating a research layout 
Literature review   
Formation of the research Plan  
Selecting of the Appropriate
Research Techniques
 
Secondary data collection  
Analysis of the Secondary Data
Collection
 
Findings of the Collected Data 
Conclusion of the Research Study 
Formation of Rough Draft  
Submission of Final Work to the
Project Supervisor
 
Table 1: Gantt chart
(Source: Created by the author)

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3.10 Summary
The chapter described different research methods which help the researcher to do of
better data analysis on selected research topic. The researcher tried to side with of the nature of
the research study along with research techniques so that most excellent research methodologies
are being framed. The research methodology tools are used to evaluate the concepts of the supply
chain activities into the downstream sector of oil as well as gas industry. Entire research study is
based on secondary data collection and qualitative data analysis methods to understand the
supply chain activities into oil industry. Positivism is selected as research philosophy, deductive
as research approach, descriptive as research design to determine the supply chain framework of
the study. Both times, budget as well as research scope is maintained properly to complete the
research work on scheduled time.

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Chapter 4: Research Data
4.1 Introduction
The oil and gas industry in Nigeria is a major source of income into the country. Nigeria’s
total earnings are 95 percent from their oil industry. Therefore, this industry is playing a
significant role into the economy of Nigeria. Okoro and Chikuni (2017) stated that Nigeria is
biggest exporter of the oil along with gas within Africa. According to “USA Energy Information
Administration”, the oil reserves of Nigeria are between 17-22 billion barrels, while some of the
sources claimed that this figure is approximately 35 billion.
4.2 Nigeria crude oil production
Year Q1 Q2 Q3 Q4
2013 2.29 2.11 2.26 2.16
2014 2.24 2.21 2.12 2.19
2015 2.18 2.05 2.17 2.16
2016 2.11 - - -
Table 4.1: Nigeria crude oil production
(Source: Tradingeconomics.com, 2017)

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2013 2014 2015 2016
0
0.5
1
1.5
2
2.5 2.29 2.24 2.18 2.112.11 2.21 2.05
0
2.26 2.12 2.17
0
2.16 2.19 2.16
0
Q1
Q2
Q3
Q4
Figure 4.1: Nigeria crude oil production
(Source: Tradingeconomics.com, 2017)
From the above chart, it is analyzed that in the first quarter of the year 2016, the
production of crude oil is stood at 2.11 million barrels per day (mbpd), which is lower as
compared to lower from the production in quarter4 of the year 2015. The production of oil is
lower as relative to the quarter in the year 2015 by 0.07 mbpd when the output is recorded at
2.18mbpd. The result is that there is real growth of the oil sector is showed by 1.89% in Q1 in
the year 2016. It represents that there is an improvement relative to growth which is recorded in
2015 (Q1) when there is increase in growth of 8.15% (Tradingeconomics.com, 2017). As share
of the Nigeria’s economy, the oil sector is contributed to 10.29% of the real GDP, which is lower
than the share which is recorded in period of the year 2015, higher from the share in Q4 of the
year 2015 by 2.24% points.

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4.3 Distribution of GDP across economic sectors from 2010-2016 in Nigeria
Agriculture Industry Services
2010 24% 24.91% 51.20%
2011 22.29% 27.84% 49.87%
2012 22.05% 26.72% 51.22%
2013 21% 26.04% 52.97%
2014 20.24% 24.95% 54.82%
2015 20.86% 20.38% 58.76%
2016 21.18% 18.46% 60.36%
Table 4.2: Distribution of GDP across economic sectors from 2010-2016
(Source: Global Finance Magazine, 2017)
2010 2011 2012 2013 2014 2015 2016
0%
20%
40%
60%
80%
100%
120%
23.89% 22.29% 22.05% 21.00% 20.24% 20.86% 21.18%
24.91% 27.84% 26.72% 26.04% 24.95% 20.38% 18.46%
51.20% 49.87% 51.22% 52.97% 54.82% 58.76% 60.36% Services
Industry
Agriculture
Figure 4.2: Distribution of GDP across economic sectors from 2010-2016
(Source: Global Finance Magazine, 2017)

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The above chart analyzed that there is a distribution of GDP across the economic sector
of Nigeria from the year 2010-2016. In the year 2016, the agriculture is contributed around a
percentage of 21.18% to the GDP of Nigeria. It is contributed to 18.46% from the industry along
with approximately 60.36% from the service sector (Tradingeconomics.com, 2017).
4.4 Natural gas production in Nigeria
Years Nigeria (in cubic meters)
2001 15,680,000,000
2002 17,890,000,000
2003 19,200,000,000
2004 21,800,000,000
2005 25,400,000,000
2006 31,678,000,000
2007 34,100,000,000
2008 32,820,000,000
2009 23,210,000,000
2010 29,000,000,000
2011 31,360,000,000
Table 4.3: Natural gas production in Nigeria
(Source: Nnpcgroup, 2017)

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
0
5,000,000,000
10,000,000,000
15,000,000,000
20,000,000,000
25,000,000,000
30,000,000,000
35,000,000,000
40,000,000,000
Natural gas production-cubic metres
Figure 4.3: Natural gas production in Nigeria
(Source: Nnpcgroup, 2017)
From the above chart, it is analyzed that the production of natural gas is shown from the
year 2001-2011. From the year 2001-2007, there is an increase into the gas production, but
suddenly in the year 2008, there is a decrease into the production by 1,280,000,000 cubic meters.
In the year 2010 and 2011, there is again an increase into the production of natural gas. The
consumption of domestic gas is expanded as result of the ongoing power sector. The production
of natural gas in Nigeria is low based on the larger amount of proved reserves of the natural
gases (Nnpcgroup, 2017). Therefore, Nigeria is considered as the largest exporter of the natural
gas via the LNG.

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4.5 Case study analysis
4.5.1 Chevron Nigeria Limited case
It is a global energy company which is operated in various regions including Nigeria. The
downstream activities of the company is the chemical business, that is responsible towards
refining, marketing, manufacturing of chemicals, achieving of utilization of refining in more than
of 10 years. The company is anticipated that there is an increase of crude oil in the future as
continued to growth into demand as well as slow of the growth of supply which brings the global
markets into balance. In the downstream business of the company, the crude oil is largest cost
component of the refined products. Chevron spends of $2.5 billion into the local content
development of Nigeria’s oil as well as gas sector, which represents of 65% of the total goods
along with services of Nigeria expenditures for the year (Guardian.ng, 2017). The company
develops its supply chain by enhancement of the local suppliers and they have capability to meet
with the industry standards. In the year 2016, the company spends of $39 billion into the goods
as well as services. Chevron is second largest producer within Nigeria, which is engaged into
building of the production to around 400,000 b/d from the past levels of 350,000b/d.
Oil fields 5 (Abig-birodo, Belema, Idama, Inda, and
Opuekeba)
Average daily
production of oil
120,000 net barrels of oil per day
Annual production of
oil
3.5 million barrels per day
Natural gas 1.1 billion cubic feet per day

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Average total daily
sales of gas
670 million cubic feet
Table 4.4: Oil and gas reserves and production of Chevron Nigeria Limited
(Source: Guardian.ng, 2017)
In Nigeria, the company is produced as well as explored of oil. The Agbami Field is
produced of an average of 120,000 net barrels of the crude oil per day in the year 2016. Into the
next development phases, there are final 15 wells- Agbami 2 as well as Agbami 3 (chevron,
2017).
4.5.2 Exxon Mobil case
Exxon Mobil is operated in Nigeria into exploration as well as production of the crude oil
along with natural gas. The downstream business units of the company are focused on providing
of the finished products as well as feedstock to the customers mainly throughout distribution as
well as marketing organization. The refining process is done into 45 refineries with a distillation
capacity of six million barrels per day. It is operated in Nigeria with $40 billion in annual profits
as well as 5.3 million barrels into oil per day. In the year 2013, the company started to contribute
with Wolverine pipeline system in order to improve over their logistics. The company’s
downstream is varied business with largest refiner as well as distribution facilities. The company
holds an ownership interest with the distillation capability of 5.3 million barrels per day into 31
refineries (Cdn.exxonmobil, 2016). The company is integrated of more than 75% of the refining
operations with combined with the chemical productions.

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Oil reserves and production Gas reserves and production
Average daily
production of oil
5.3 million barrels Average daily
production of gas
11.8 million cubic feet
Annual production of
oil
25.2 billion barrels Sales of natural gas 14.3 million cubic feet
Refinery throughout
per day
4.5 thousand barrels Annual production of
gas
7.1 trillion cubic feet
Production of
petroleum [per day]
5.8 thousand barrels Gas plant liquids 259
Table 4.5: Oil and gas reserves and production of Exxon Mobil
(Source: Cdn.exxonmobil, 2016)
4.5.3 Royal Dutch Shell case
In Nigeria, Royal Dutch Shell’s operations are carried out into four of the subsidiaries-
Shell Petroleum Development Company of Nigeria Limited. The joint venture is accounted for
more than 21 percent of the total petroleum production of Nigeria. The total production of
Nigeria’s oil production is 629,000 barrels per day from eight of their fields. Almost 14% of the
production of Shell comes from Nigeria. The part of Niger Delta has yielded to approximately
$30 billion into the oil revenues (Royal Dutch Shell plc annual report, 2016). As per the study
conducted in Nigeria, there is total of 2.4 million of the barrels which are leaked into the
Nigerian delta.

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Oil fields 8
Natural gas plants 8
Wells More than 1000
Annual production of oil 3.9 million barrels per day
Average production of oil
sales
2.95 million barrels per day
Annual production of gas 364 billion cubic feet
Average production of gas 2954 thousand boe per day
Table 4.6: Oil and gas reserves and production of Shell Nigeria
(Source: Reports.shell, 2016)
4.6 Summary
It is summarized that the case oil as well as gas industries are coordinated and optimized
with the supply of the crude as well as feedstock to the refineries, with the manufacturing of
mixed products and inventory levels. The selected case organizations are managed to have a
global logistics system which includes of high ownership interest. Among the three case
organizations, Exxon Mobil oil and gas industry tries to meet with the marketing business
portfolio to meet with the requirements of the local consumers by applying of business
processes, programs related to marketing in addition to best practices. The oil as well as gas
industry is serving diverse customer base in all over the world. The organization’s downstream
activities are refining throughput along with sale of final products as well as goods. The global
supply organizations are coordinated as well as optimized of the supply of both crude as well as
feedstock to refineries in addition to working of the inventory levels.

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Chapter 5: Discussion
The three of the companies into the oil as well as gas industry such as Royal Dutch Shell,
Chevron Nigeria Limited and Exxon Mobil are chosen as the case examples. Three of the
companies are being compared based on the revenues, profits, reserves of the oil as well as gas
along with production of oil and natural gas. Annual reports of the organizations, famous
business magazine as well as websites of the oil and gas industries are chosen as sources for
gathering the data to analyze the selected research topic. While some of the differences between
average as well as annual daily oil as well as gas production is evident for the research study. All
the three selected companies are seeking more opportunities to expand as well as recover the
international relationships with other foreign partners. Chevron is increased their sales of gas and
then kept progressing into several oil and gas projects (Guardian.ng, 2017). Exxon Mobil is
increased the capacity along with increased into production of diesel quantity. Year-by-year, the
organizations are achieving improvements over some of the business aspects such as exploration,
oil production, natural gas production, transportation as well as refining.
Oil production Gas production
Daily average Annually Daily average Annually
Chevron
Nigeria Limited
120,000 net
barrels of oil per
day
3.5 million
barrels per day
670 million cubic
feet
1.1 billion cubic
feet per day
Exxon Mobil 5.3 million
barrels
25.2 billion
barrels
11.8 million
cubic feet
7.1 trillion cubic
feet

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Royal Dutch
Shell
2.95 million
barrels per day
3.9 million
barrels per day
2954 thousand
boe per day
364 billion cubic
feet
Table 5.1: Three biggest oil and gas players
From the above table, the researcher discussed that daily average production of oil is
maximum in case of Exxon Mobile with 5.3 million barrels as compared to Royal Dutch Shell
and Chevron Nigeria Limited. Therefore, the annual production of oil for Exxon Mobil is more
with a value of 25.2 billion barrels as compared to Royal Dutch Shell (3.9 million barrels per
day) and Chevron Nigeria Limited (3.5 million barrels per day). In the gas production, the daily
average is 670 million cubic feet for Chevron Nigeria Limited, 11.8 million cubic feet for Exxon
Mobil and 2954 thousand boe per day for Royal Dutch Shell. Therefore, it is seen that there is
annual gas production is Chevron Nigeria Limited (1.1 billion cubic feet per day), Exxon Mobil
(7.1 trillion cubic feet) and Royal Dutch Shell (364 billion cubic feet).
Royal Dutch Shell is considered as the second largest organization based on its revenue
into oil as well as gas industry after Exxon Mobil. The supply chain management of Royal Dutch
Shell is working efficiently in order to provide the quality services to the customers. The issues
related to SCM are control of the cost, planning, managing of risks and suppliers relationship
management (Ahmad et al., 2016). Due to increase into globalization of businesses, SCM
becomes a critical issue into the oil as well as gas industry. SCM is used of freight mode to
deliver products towards the organization. Extra costs are incurred by SCM to provide the best
services to customers. Increase into the fuel price is huge as it is a threat for the SCM as it is
created of extra costs for the selected oil industries (Ambituuni, Amezaga and Emeseh, 2014). In
order to overcome issues related to SCM, Royal Dutch Shell establishes of strategies to evaluate

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the products of oil along with gas. At the time of reducing the freight cost, Royal Dutch Shell
uses of economical mode of freight to reduce the cost. In order to reduce the risk level, Royal
Dutch Shell evaluates the market condition proficiently. The downstream supply chain of Shell
offers opportunity to generate o value across the global supply chain and gain of various business
areas (Val et al., 2016). It is competitive environment where its aim is to deliver of Shell
products safely while it is maximizing the profits as well as competence. Royal Dutch Shell
formed of strategies to resolve the issues that their business organization is facing such as
decrease into the sales, decrease in brand image as well as its operations.
The approach of Chevron is to manage the supply chain focused on two of the elements
which are critical to manage the commitment to become a good partner. The supply chain is a
powerful tool to create prosperity among the communities where it is operated around the
worldwide (Okoro and Chikuni, 2017). Chevron is recognized that there is a positive impact of
the supply chain investments that is amplified by sourcing of the decisions of the suppliers. It is
encouraged of major international suppliers of the goods as well as services in order to form of
partnerships with the local businesses. It is done to maximize purchase of local goods as well as
services. Joint venture creates of an opportunity for the local businesses in order to gain access to
the new technology. It brings of process up to the international standards and then trains people
based on industry’s practice. Chevron is sought to build as well as maintain of supply chain
which reflects deeply on the community values diversity. Chevron needs the key suppliers
adhere to the domestic laws as well as encourage to align of the practices with “International
Labor Organization” core principles (Global Finance Magazine, 2017). Chevron expects of the
business partners for treating the employees and interacting with the communities into proper
manner with the policy of human rights, labor rights in addition to the organizational principles.

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In the year 2016, Exxon Mobil has made payments to approximately 90,000 suppliers of
goods as well as services worldwide. The oil and gas industry is promoted a supply chain which
respects the human rights along with organizational environment to generate opportunities for
previously underrepresented groups. The suppliers of Exxon Mobil are encouraged to take
actions for improving the performance of environment. The organization works with
collaboration of the key suppliers for identification of opportunities for continuous improvement
into the environmental performance (Cdn.exxonmobil 2016). It creates off shared value for the
business and also the suppliers. Exxon Mobil is seeking of relationships with the suppliers for
contributing of economic development into their business operations.
Some of the case studies are found into the literature on how to integrate of supply chain
management program which are used by the oil as well as gas company for improving
operational efficiency and resulting into lower the cost. Ngoasong (2014) described of two field
of applications to integrate of process of supply chain management. The weather conditions
which exist into the area made the delivery of supply as well as operations. By use of just-in-
time, the provider can plan, order, and prepare logistics and install of the supply chain into the
organization. Training as well as coordinating of the workforces and also activities of the local
service providers, the manager of supply chain enables to accomplish of logistics requirements
(Yusuf et al., 2014). It is analyzed that natural gas production is low into Nigeria focused on
larger amount of reserves of natural gases. Therefore, Nigeria is to be considered as larger
exporter of the natural gases such as LPG. Into the Nigeria, oil as well as gas sector are spending
more money into its development.
The oil as well as gas industry develops of it supply chain by support from the local
suppliers. The downstream sector of this industry is varied business with largest refiner as well

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as distribution facilities (Raut, Narkhede and Gardas, 2017). The oil as well as gas industry
serves towards diverse customer base in all over the world. The downstream activities of oil as
well as gas industry are refining in addition to the sale of final products, services as well as
goods. Therefore, logistics is considered as the main part of the supply chain to produce and
provide of goods along with services based on customer’s requirements. Timely delivery is also
considered as important factor of supply chain. Adapting of the supply chain wide technology
strategies result into each user of the system along with the chain of seeing the single file system.
It accesses of the computational servers with superior speed data access (Val et al. 2016). It
connects to the real time higher speed visualization furthermore participates into reasonable
collaborations. It is crucial to increase the benefits of collaboration among the oil as well as gas
company in addition to the supplier organizations.
It is also analyzed that the companies those are recognized to improve the efficiencies of
supply chain represents huge area for savings of the cost. Into the logistics area, it is estimated
that there is average of revenue is between 10-20 percent. The selected oil as well as gas
industries believes that the supply chain in which they are participating as the customers as well
as suppliers which create of competition rather than the individual companies (Ahmad et al.,
2016). Despite there is huge importance of the oil and gas in daily life along with the operational
challenges it involves. The objectives of this research study are to light the challenges as well as
opportunities into the supply chain management of oil industry. This discussion is focused on the
practice which saves companies millions of dollars. The logistics network into the oil as well as
gas industry is inflexible that arises from the production abilities of the supply of crude oil, lead
time for longer transportation along with limitations towards the mode of transportation
(Ambituuni, Amezaga and Emeseh, 2014). Each of the point within the logistics network is a

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major challenge. Moreover, the mode of transportation process is to be carried out by the
pipelines and trucks along with ships. Shipment is to be exploited various transportation modes
before it reaches the final location of the customers. Very few industries are dealing with this
type of complexity of shipping.

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Chapter 6: Conclusion and Recommendations
6.1 Conclusion
This research study provides a conclusion from the aim and objectives of this particular
study. Recommendations are also suggested to improve over the supply chain activities into
Nigerian downstream oil as well as gas industry. Most of the past researchers are linked to the
integration of supply chain towards the operational presentation of oil and gas industries of
Nigeria. Supplier is sight as short term trader but not the business partner. It is the rationale why
the company is towards speedy integration and involvement into them. Relationship among the
supply chain activities builds a long term sustainable commitment to achieve of the
organizational goals which is missed among the upstream suppliers as well as network of the
supply chain. Into this research context, oil as well as gas industry improves in real time
information with the suppliers in addition to other third party logistics provider. The providers
are provided of customer orders; inventory as well as replenishment requirements in order to
element the suppliers. The components of suppliers are forecasted into real time market demand
and prepare the capabilities to limit the waste as well as cost. There is a requirement of supply
chain combination into the downstream sector of oil industry to progress over outsourced client
touch points.
6.2 Linking with objectives
Based on the data analysis results, the researcher has given answers to the identified
research objectives. Based on the objectives, the researcher linked the analyzed results and given
proper justifications to each of the objectives as follows:

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GAS INDUSTRY
Linking with objective 1: To discuss the supply chain activities of Nigeria downstream
oil and gas industry
Nigeria has lower cost of crude oil producer along with the international price of oil fixed
in US dollars. The oil and gas industry of Nigeria implements of supply chain management
throughout use of energy saving devices such as equipment for consumption of lower energy,
sensor, reducing of air pollution, health and safety standards and use of recycled materials.
Linking with objective 2: To analyze and review of current supply chain strategies in
Nigeria’s oil and gas industry
The identified strategies for supply chain are segmentation of customer, customization
over the logistics network, form of partnerships, and outsourcing. SCM into the industry needs
the company to integrate of their decisions which are made in the customer’s chain as well as
suppliers.
Linking with objective 3: To identify the challenges in supply chain of downstream
sector of Nigeria’s oil and gas industry
There are various challenges of supply chain such as logistics, integrated process
management and information system challenges. Due to longer distance among the supply chain
partners and transportation, there is raise into the cost for transpiration. The oil industry is lagged
behind the use of integrated planning across their supply chain. Due to globalization, it provides
a bad effect on the use of information system.
Linking with objective 4: To find out good framework for Nigeria’s oil and gas supply
sector

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GAS INDUSTRY
The supply chain theories are suggested that the chain is used to manage from end-to-
end. Due to global as well as strategic nature of the supply chain activities, it will influence the
achievement of the sustainable future towards oil as well as gas industry.
6.3 Recommendations
The most important recommendations deal with the supply chain activities are as follows:
Usage of supply chain system: The oil as well as gas industry should use of supply chain
system as well as storage units for efficiently optimization of the supply chain as the storage is
key significant factor. Improvement over the supply chain integration is also required to support
and achieve industry wide added value within the field of the global supply chain.
Conventional silos approach: This particular approach within the oil as well as gas
business has garnered the limited suboptimal structure within the downstream supply chain.
More demand based operations lead to develop the supply chain from increased significant
improved into profitability which is required to be achieved.
Cultural changes: There are some cultural changes are required within the oil as well as
gas industry to be used as the change management tools where there is new supply chain
paradigm shift are required into the downstream oil industry of Nigeria.
6.4 Limitations of the study
The study is limited by the fact that it is a cross sectional study secondary data. The study
is limited to the descriptive analysis of the supply chain models and theories. The pattern of the
research study conducted in this particular study requires replicating in other industrial contexts.
It is also interested for the researcher to determine if the supply chain integration is useful to vary

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GAS INDUSTRY
from context to context. In this research study, there are two types of constraints are raised, time
as well as cost constraints to evaluate the data based on secondary data source. It limits the
researcher to provide with statistical analysis of the data. This particular study is only conducted
by use of data and information from the journal articles. Due to use of applications from
secondary sources along with qualitative analysis, SPSS application is being reduced from the
study.
6.5 Future scope of the study
In the future, the researcher should conduct a longitudinal study to categorize the aspects
of the supply chain model for the development into the Nigeria’s downstream oil as well as gas
industry. This particular research is only limited to the recognition of the supply chain factors
which affect the downstream sector of the selected industry. The scope of this study is limited
due to time as well as budget limitations. In the future, other supply chain activities are discussed
which are related to the oil as well as gas industry. It will encourage the researcher to conduct the
study from different theoretical approaches on the similar area.

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Appendix
Reflection
In order to complete this study, I have used of secondary data analysis for gathering of
the data from various sources. After gathering of the data from various sources, it helps me to
perform my work. When I have understood the selected research topic accurately, then only I
have understood the argument of the statement of author. When gathering information for my
research work, at every step I have taken the help of my supervisor so that the supervisor can
give me feedback at every step. The way to conduct the research is being conducted by using of
the data analysis methods. I have conducted a case study analysis for comparing the supply chain
activities of three of the oil and gas industries those are operating in Nigeria. It helps me better to
conduct this study properly. I have spent most of the time in gathering of the data for my study.
While collecting of the data, I have used of different sources from the three oil and gas
companies report such as Royal Dutch Shell, Chevron Nigeria Limited as well as Exxon Mobil.
Comparison of the supply chain helps me a lot in my research work.
I have done the research based on the research aim in addition to objectives. Based on
selected four objectives which I have mentioned into the Chapter-1, I have done the entire
research study. I have reviewed the literature based on the research questions. I have analyzed
the total production of oil from three companies both in average and annually. I have also
analyzed that total production of gas. After that, I have compared the three company’s total
production. I can able to identify the business operations of the selected companies into the
downstream sector. I have gathered the information from the company’s supply chain reports,