Universal 2-Tag System

Two models are specified for this research. These include the profitability equation for objective 1, and the Market Share equation for objective 2. These are shown below:

Profitability Equation

This equation examines the extent to which grievance management affects the profitability of oil producing companies in host communities in the Niger delta region of Nigeria.

PRT= f (GFOB, NOSP, MHL, TNOVR, EXCR, IMP, EXPt-1,) ^et ……….(i) The above can be restated as follows:

PRT= a₀ + a₁LGFOB + a₂LNOSP + a₃LMHL +a₄LTNOVR +a₅LEXCR + a₆LIMP_t-₁ + a₇LEXP_t-₁₊^e_t ……(ii)

Where:

e

t = Stochastic term

a₀ + a₇ = Parameter Estimates

LGFOB = Log of Fire Outbreaks resulting from Petroleum Tanker Explosion LNOSP = Log of oil Spill

LMHL = Log of Man Hour Loss LTNOV – Log of Turnover LEXCR = Log of Exchange rate

LIMP_t-1 = Log of Imports at a particular point in time LEXP_t-₁ = Log of Exports at a particular point in time

This Profitability equation seeks to ascertain the effect of Grievance management on the Profitability of Oil Producing Companies in the Niger Delta region of Nigeria. The dependent variable which is Performance is proxied for profitability, productivity, sustainable community development, Economic Development, and market share, while grievance management is proxied for pipeline vandalism, Volume of Oil Spill, Number of Oil spills, and Number of Fire Outbreaks resulting from petroleum tanker explosion.

The above model construes Profitability to be dependent on Fire Outbreaks resulting from Petroleum Tanker Explosion, oil Spills, Man Hour Loss, Turnover, Exchange rate,

Imports, Exports which are independent variables. Fire Outbreaks resulting from Petroleum Tanker Explosion is an indicator of poor grievance management by the oil producing companies. Oil Pipeline Vandalism is the illegal or un-authorised act of destroying or puncturing of oil pipelines so as to disrupt supply or to siphon crude oil or its refined products for purposes of appropriating it for personal use or for sale on the black market or any other outlet. It includes such acts as oil bunkering, breaking oil pipelines to siphon fuel, scooping fuel from burst oil pipes and the deliberate act of oil terrorism., Profit is the balance arrived at after deducting cost of production and operating activities from income of of a firm. An Oil Spill is the leakage of petroleum products from pipelines and flow lines, blowouts from well-heads due to poor maintenance, damage and spills from flow-stations, and spills from pipeline or well-heads due to vandalism. Production Volume is the total volume of crude oil production of the selected firms. Man Hour Loss is the total number of hours lost by each company in her operations due poor grievance management of the concerns of host communities emanating from , work disputes, shutting down of company operations due to host community grievances. Turnover is the Exchange rate is the equivalent of foreign currencies to the local currency in naira. It is very important in determining product supply and demand, as the higher the exchange rate, the higher the cost of production and vice versa. Export for the period under study signifies the amount of goods sold outside a country. It is a major source of foreign exchange to firms.

Market Share Equation

This equation examines the implication of grievance management on the market Leadership (Market Share) of oil producing companies in host communities in the Niger delta region of Nigeria.

MKTS= f (OPV, EXCR, OLREV, TNOVR, BOP, IMPt-1, EXPt-1,) ^et ……….(i) The above can be restated as follows:

MKTS= a₀ + a₁LOPV + a₂LEXCR + a₃LOLREV +a₄LTNOVR +a₅LBOP + a₆LIMP_t-₁ + a₇LEXP_t-₁₊^e_{t …..}(ii)

Where:

e

t = Stochastic term

a₀ + a₇ = Parameter Estimates

LOPV = Log of Oil Pipeline Vandalism LEXCR = Log of Exchange rate LOLREV = Log of Oil Revenue LTNOV – Log of Turnover

LBOP - Log of Balance of Payment

LIMP_t-1 = Log of Imports at a particular point in time LEXP_t-1 = Log of Exports at a particular point in time

This Market Share equation seeks to ascertain the implication of grievance management on the market Leadership (Market Share) of oil producing companies in host communities in the Niger delta region of Nigeria. The dependent variable which is Performance is proxied for market share, while the Independent Variable (grievance management) is proxied for pipeline vandalism, Volume of Oil Spill, and Number of Oil spills. The above model construes Market Share to be dependent on Number oil Spills, Oil Pipeline Vandalism, Volume of Oil Spills, Turnover, Exchange rate, Imports, Exports which are independent variables. Oil Pipeline Vandalism is the illegal or un-authorized act of destroying or puncturing of oil pipelines so as to disrupt supply or to siphon crude oil or its refined products for purposes of appropriating it for personal use or for sale on the black market or any other outlet. It includes such acts as oil bunkering, breaking oil pipelines to siphon fuel, scooping fuel from burst oil pipes and the deliberate act of oil terrorism. An Oil Spill is the leakage of petroleum products from pipelines and flow lines, blowouts from well-heads due to poor maintenance, damage and spills from flow-stations, and spills from pipeline or well-heads due to vandalism. Balance of Payment (BOP) is a systematic statistical record of the economic transactions between the residents of one country and those of the rest of the world during a given period of time- usually one year. The BOP data presented here is the per centage of Gross Domestic Product. Exchange rate is the equivalent of foreign currencies to the local currency in naira. It is very important in determining product supply and demand, as the higher the exchange rate, the higher the cost of production and vice versa., Export for the period under study signifies the amount of goods sold outside a country. It is a major source of

foreign exchange to firms. Import is the value of goods brought into a country from foreign countries through exchange.