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Exploring the Supply Chain Strategies for Mitigating Geopolitical Risk in Nigeria’s' Oil

and Gas Industry

1
CHAPTER: INTRODUCTION
1.1 Introduction
The complexity of supply chain management has increased as managers focus on issues
welcomed by data innovation progressions, rethinking, varied sourcing, globalization, and the
drive for lean and green supply chains (Basu,2023). Although these projects' performance
impact has attracted a lot of attention from researchers and has been praised, they also tend to
make supply chains more susceptible to disturbances (Meriton et al.,2021). Any commodity
supply chain that experiences a severe interruption might potentially result in a firm's closure
and have a considerable adverse consequence on profit, creation level, corporate standing,
investor worth, and client connections. All economic sectors that rely on oil for fuel energy
might be severely impacted by a significant interruption to the oil and gas industry, which could
also have a disastrous impact on the country's GDP (Iqbal et al., 2020). All businesses
experience supply chain disruption tendencies, while smaller businesses may experience more
severe effects than bigger ones (Veselovska, 2020). This is because they miss the mark on inner
and versatile capability, adaptability, and overt repetitiveness to stay strong and counter store
network risk as it emerges, more modest organizations typically take longer to recover from
supply chain strain (Cohen et al., 2022)
When there are significant interruptions, the majority of small supply networks have a
tendency to collapse, and many of them virtually ever recover. It might take some businesses
more than two years to perform at their pre-disruption level (De Martini, 2021). Hendricks &
Singhal (2005) correctly pointed out that a disruption has a gravely detrimental impact on a
business's economics, profitability performance, shareholder value, and stock price volatility,
no matter what the beginning of the disturbance, the kind of the firm, or when the interruption
happens (Udofia et al., 2021). This chapter will examine the background of study in which the
study will examine other studies in relation to this. The statement of the problem will follow in
which the study will find a gap in relation to the topic in question. Research objectives together
with questions will also be highlighted briefly. Conclusively, dissertation and chapter summary
will bring the chapter to an end.

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1.2 Background of the study
The main one-time events brought on by terrorism, political unrest, and natural
disasters have made the supply chain vulnerable (German, 2023). Examples include the blast of
an oil pipeline brought about by assailant and radical associations in the Nigerian Niger Delta,
oil workers' union strike in the region, the huge fire catastrophe that destroyed gas depots,
tank farms, and oil ships, the port strike on the west coast, the northeast blackout, and other
natural disasters (Geng & Kajimoto, 2021). However, ineffective management of the inward and
outer organizations of the petrol area store network may be the reason for a few unexpected
production network disturbances, particularly in Nigeria's downstream oil industry (Ari, 2021).
The oil inventory network with regards to this study might be conceptualized as a virtual
organization of organizations, individuals, innovation, exercises, data, and monetary assets that
are reliant upon the oil and gas industry (Sheng et al., 2021).
The production network in the petrol business is very muddled and unbending when
contrasted with different enterprises (Georgewill, 2021). One such instance was the 2020 fire
tragedy that rendered Sunflag Textile Company in Lagos, Nigeria completely unusable for about
three years. Long lead times for transportation, the limitations of accessible methods of
transportation, and the creation limit of unrefined petroleum providers are the principal causes
of inflexibility. The petrochemical supply chain emerges from the several infrastructures and
international outsourcing firms that function within the sector (Andersen et al., 2020).
According to Tarei (2021), balancing supply and demand for petroleum products is a difficult
process due to inflexibility and complexity, which raises the possibility of interruptions. The
extraction of crude oil marks the start of the petrol store network process, which closes with
the conveyance of refined oil-based commodities to clients. Attributable to its unpredictability,
each break in the chain can possibly subvert the cycle, bringing about postponements and
disturbances across the oil-based goods conveyance framework (Udogbo, 2021). When we talk
about disruption, we mean unintentional, isolated incidents that seriously reduce a supply
chain network member's activity and efficiency for an unforeseen amount of time and have a
large detrimental impact on the system (Rijanto, 2021).

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The upstream, center, and downstream areas make up the petrol business production
network, with Nigeria being the landmass' top oil maker. Most of nautical organizations
engaged with the creation, investigation, and abuse of unrefined petroleum make up the
upstream area (Patidar et al., 2024). Petroleum products are refined and stored in depots and
tank farms by the midstream supply chain companies (Yu, 2021). The exercises of the
downstream inventory network incorporate advertising, circulating, and moving refined oil-
based goods from import piers or processing plants to retail locations so that consumers may
receive them. The downstream petroleum supply chain in Nigeria is the main subject of this
study (Owulaku & Tetteh, 2022). A complex network of logistics companies and petroleum
service providers make up the downstream supply chain layer. These organizations rely on
information networks and physical infrastructures to carry out their operations (Mohebbi et al.,
2020). The intricate nature of the downstream oil service chain suggests that every activity
center and supply chain partner have the potential to cause disruption, which calls for rigorous
identification, monitoring, and management (Ningombam, 2021)
Drivers are the origins of supply chain disruptions, according to Parast & Subramanian
(2021). Several sources of disturbances in the petroleum supply chain are identified in the
literature, including: outsourced third-party logistics (3PL) companies- According to a recent
report by Ijeomah (2020), Nigeria is the nation that outsources the most of her oil production
and delivery, making her more susceptible to disruption threats. Disruption is increased by
internal operations, external environmental variables, and certain components of the
petroleum supply chain (Ebrahimi, 2022). Natural disasters, political unrest, and worldwide
financial crises are a few instances of outside environmental factors that might interrupt a
supply chain. The association's capacities, data quality, inner activities, and inventory network
process perceivability are a few potential wellsprings of tension for petrol store network the
board (Gupta et al., 2021).
Functional gamble is the term used to portray the interferences brought about by issues
that emerge inside an association's boundaries and effect the organization's ability to fabricate
and give labor and products (Wang et al, 2023). Globalization, long lead times, short item
timeframes of realistic usability, more prominent re-appropriating, and the developing interest

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for adaptable, lean, and harmless to the ecosystem store network the executives are a portion
of the variables that impact the inventory network (Munir et al, 2023). Understanding these
factors can help managers determine how vulnerable their supply chain is, and vice versa (Li et
al., 2021). It is the responsibility of managers to develop plans of action or put regulations in
place that will effectively and efficiently minimize supply chain disruptions, either by lowering
the likelihood that they will occur, minimizing their effect on the inventory network, or totally
eliminating the dangers (Albertzeth, 2020). The writing offers several approaches to minimizing
supply chain interruptions.
According to Izumi (2021), planning might be done in two ways: either long-term or
short-term, with the goal of developing mitigation strategies and backup plans. Increases in
capacity, stock, responsiveness, adaptability, conglomerating request, and keeping a different
and complex provider base are among the recommendations made by Sudan et al., (2023).
Rahman (2022) lists rerouting deliveries, expediting orders, contingent sourcing, and lateral and
vertical emergency transshipments as examples of mitigating strategies. Dual sourcing, more
product, volume, route, and delivery flexibility, as well as information visibility and
management, are suggested by Doetzer & Pflaum (2021). According to Patel (2023) proposal,
having a flexible supply base helps a company manage normal variations in supply and demand
and fosters organizational resilience in the event of a significant disruption.
1.3 Research Aim
The primary aim of the study is to explore the supply chain strategies for mitigating
geopolitical risk in Nigeria’s' oil and gas industry.
1.3.1 Research objectives
I. To determine the geopolitical risks that the Nigerian oil and gas sector
faces and how they affect the sector's supply chain operations.
II. To ascertain the supply chain management procedures currently in use in
Nigeria's gas and oil sector.
III. To examine the key drivers of geopolitical risks and their evolution in
Nigeria’s oil and gas industry.

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1.3.2 Research Questions
I. What are the geographical risks faced by the Nigerian oil and gas industry
and their impact on the supply chain operations of the industry?
II. What are the existing supply chain management practices in Nigeria’s oil
and gas industry?
III. What are the key drivers of geopolitical risks and their evolution in
Nigeria’s oil and gas industry?
1.4 Problem Statement
As the fundamental kind of revenue and a significant supporter of the Gross domestic
product of Nigeria, the oil and gas area is essential to the nation's economy (Ebimobowei,
2022). International worries, be that as it may, which emerge from both inside and unfamiliar
sources including political flimsiness, social turmoil, and worldwide market elements, plague
the business (Salomone, 2022). The appropriate activity of the oil and gas inventory network is
seriously hampered by these dangers, which can create setbacks, interferences, and monetary
misfortunes for industry members (Ngeumbi et al., 2023).
Nigeria's oil and gas industry faces various and multifaceted international worries,
remembering threats to security for the Niger Delta, muddled guidelines, defilement, and
changes in world oil costs (Akindoju, 2020). These dangers influence not simply the main
concern and everyday tasks of oil and gas enterprises, yet also the steadiness and headway of
the country in general.
Indeed, even while international worries are recognized, there is as yet an absence of
information concerning the exact store network strategies that, on account of Nigeria's oil and
gas area, could effectively decrease these dangers (Owoputi, 2020). According to Moh’d (2023),
who has significant experience in the fundamental gamble of the executive's procedures in
supply chains, there is a shortage of study that explicitly addresses the particular troubles and
potential outcomes presented by Nigeria's international elements. To really oversee
international dangers, supply should chain strategies explicitly intended for Nigeria's oil and gas
industry be explored and recognized (Mogbolu, 2021). By doing this, industry members might
work on their capacity to endure stuns and stay cutthroat, shielding their business, protecting
capital, and progressing manageable turn of events.

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1.5 Significance of the Study
Since the oil and gas business is so vital to Nigeria's economy, it is basic to appreciate
and oversee international dangers to keep up with the business' security, development, and
manageability. This examination will offer huge experiences for industry partners, states, and
financial backers by distinguishing and arranging the unmistakable international dangers
experienced by the area. This will enable them to pursue all-around informed choices and
devise centered risk the executive strategies. The examination will likewise add to the
assortment of information currently accessible on the store network the board in high-risk
circumstances by giving
helpful guidance and best practices that might be utilized in Nigeria as well as in
different regions confronting tantamount challenges.
1.6 Dissertation Structure
The study consists of five chapters. Chapter one covers the introduction, background of
the study, aim of the study, objectives, problem statement, research questions, significance of
the study, dissertation structure, and chapter summary. Chapter two covers the analysis of
theories and past studies. The past studies offer knowledge and are important in leading and
providing information to the researcher. In addition, Past examination has the mastery to grant
and is urgent in directing and providing the examiner with information. Nonetheless, the
examination system that was utilized for the review is shrouded in chapter three. Chapter four
covers an analysis of the Supply Chain Strategies for Mitigating Geopolitical Risk in Nigeria’s' Oil
and Gas Industry. Chapter Five comprises the findings, discussions, and recommendations of
the study.
1.7 Summary Chapter
The above chapter has covered an introduction of Exploring the Supply Chain Strategies
for Mitigating Geopolitical Risk in Nigeria’s' Oil and Gas Industry. On the other hand, the
background of the study was discussed. It has also elaborated the aim and objectives of
Exploring the Supply Chain Strategies for Mitigating Geopolitical Risk in Nigeria’s' Oil and Gas
Industry. Research questions were discussed. Additionally, the problem statement of the study
was discussed whereby the problems of the study were identified and elaborated. The benefits
of the study were also discussed. Lastly, dissertation of the study was summarized.

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CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
An overview of the body of research on supply chain and risk management will be given
in this section. It will assess current knowledge on worldwide issues related to risk management
techniques and supply chain management in the Nigerian oil business, as well as provide and
improve research ideas. As stated by Post et al. (2020), this study will be informed by the
theories and methodology used in earlier research, which will also make it easier to construct a
theoretical framework that is relevant to the study's background, goals, and objectives.
2.1.1 The concept of Supply chain
According to Reaidy et al. (2020), a supply chain refers to an integrated network that
links manufacturers, suppliers, customers, and distributors across purposeful connectivity for
delivery and service of a product or service to a customer. The supply chain starts from the
dispatch of raw materials to the time when the consumed end product is delivered to the user,
and that provides link between the user and company operations (Biswas & Sarker, 2020).
However, Vegnilo & Ramanello (2022) stated that the business function is cut across the
company and aids the capacity in value chain to produce and offer services to any goods for the
purpose of acquiring compensations.
According to Miao (2021), the value chain is a series of business activities through which
a firm adds value to products or services. Some activities that form functions include
procurement, production, research and development, marketing, logistics, and finance (Allal-
Cherif et al., 2021). That is, the majority of the activities are imbibed in the sphere of operations
management, adding much value to the product and service that the organizations provide to

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their customers. This is the reason why the concept of a value chain would provide good insight
into business with the recognition and appreciation of sources through which to derive
competitiveness: a concept provided by (Harden, 2019). Leao & Silva (2021) stated that in
systemizing the activities in question, the value chain will identify interactive behavior of costs
and existing and potential sources of differentiation.
As per Wangano & Shukla (2020), power across the globe's supply chain is so strong and
extremely sensitive to energy. Elements of oil marketing companies through the various chains
of domestic and international transports, visibility and control, orders, and handling inventories,
material import and export, and information technology are classic cases of methods of
managing the supply chain (Srivastava et al., 2023).
2.1.2 Challenges Facing Supply chain management in oil and gas companies
According to Vlachos (2021), the problem of fuel demand facing the oil industry is
multifarious. Weak growths have been noted in fuel demand in many areas, inasmuch as
failures in delivering on substantial growths. What is more, refining capacities imagine a better
part of the chief consumer regions. Di Giovanni et al. (2022), stated that this brings about areas
of marginal pressure arising in regions with a shortage, as the finished products of the company
start from areas with an excess. The trading is then done when just a few hours before trading
of such nature were inexistent. Nevertheless, Khan & Al-Ghamdi (2022), stated that the
situation has opened the doors of local refiners to various new markets across other countries
and given chances of efficiency within the chain of supply to a large extent. Where maximization
will take place, the underpinning capabilities need to understand interdependence in the supply
chain by management (Cobbie, 2024). Other factors strongly lying in addition to the magnitude
of intervention of government policies that have a strong bearing include exchange rates, labor
laws, and the effective mobilization of firms and suppliers in managing available resources
properly under effective competition from the Far East. According to Dong et al. (2023), other
strongly lying factors in addition include effective knowledge management in and between
suppliers and companies and effective management of internal and external networks for timely
resolution of environmental sustainability challenges.
However, Nebojsa Bacanin et al. (2021) stated that this type of scenario cannot be
reached as if every single link operates at its maximum, likened to global optimization. The

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human factors also cannot be neglected to some extent. Sathiya et al. (2023) enumerates 5 key
challenges befalling the supply chain process. First is the failure in ensuring a vengeful cost
containment approach. This is through the rapid alterations in the business environment; they
override the capability of supply chain executors to keep pace (Dhayanidhi, 2023). According to
Vuong (2023), the second is visibility in that despite the time where they often feel bombarded
by incredible amounts of information about the supply chain, struggling to process and react,
with the right information. As per Gurtu & Johny (2021), the third reason relates to the rapidly
increasing supply chain agenda in managing the risk. Degbey & Pelto (2021), stated that the
fourth one is understanding client’s intimacy in this case, it seems companies are likely to be
more knowledgeable with regards to their suppliers than their customers. As recently pointed
out, with the pressure from demand-driven approaches, companies gain more understanding of
their customers. Lastly Antras (2020) stated that, globalization had proven to be more about
driving revenue growth rather than actually saving costs. This simply means that while
compliance mandates are proliferating, so are the suppliers and information flows in a supply
chain. The larger the number of suppliers and information flows implies that the supply chains
also become longer, complex, and costly (Partanen et al., 2020). This increases the complexity to
respond to it with a single discipline and faculty with advanced or classical silo-based supply
chain management strategies and designs.
2.1.3 The concept of Geopolitical risk
According to Wang et al. (2020), in areas where oil is produced, geopolitical threats pose
serious difficulties. These hazards may manifest in a variety of situations, such as cultural
anguish, attacks on oil offices by oppressors motivated by fear, oil leaks from oil-related
machinery, burglaries, and damage to the oil foundation (Florini, 2020). As per Manners-Bell
(2023), the ability to produce crude oil has been disrupted and the supply chain's resilience has
been endangered by civil unrest, political instability, theft, and terrorist attacks. Research carried
out in Nigeria's oil-producing and gas-distributing Niger Delta region has revealed a number of
vulnerabilities in the country's oil industry, including a lack of transparency in oil revenue,
disagreements over revenue distribution, environmental harm from oil spills, and tensions
within communities based on religious and ethnic identity (Azubuike & Songi, 2021).

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According to Chichulina &Skryl (2024), geopolitical events can negatively impact oil
production infrastructure, staff morale, ecological calamities, and business financial reporting.
For example, the oil sector has diversified into offshore drilling in response to disputes in the
Niger Delta region. However, because of this diversification, contracts with cooperative partners
have had to be renegotiated, which has raised operational expenses and made it more difficult
for the sector to plan joint venture projects. As stated by Anbumozhi et al. (2020), the
performance of the supply chain is eventually impacted by these vulnerabilities, which prevent
managers in the oil sector from concentrating on supply chain management.
According to the Rahman & Maio (2020), supply chain interruptions caused by the rising
unrest in Libya affected about 67% of oil output. Kanike (2023) noted that there are few chances
for industries to affect performance when it comes to managing supply chain interruptions
brought on by geopolitical crises. Karmaker et al. (2020) noted four measures of geopolitical risk
were identified by empirical research across a wide range of enterprises and expert respondents
in industrialized and developing economies: political stability, absence of violence or terrorist
activities, human rights and regulatory excellence, and control of corruption. These criteria are
especially important for low-risk nations. Therefore, to lower geopolitical risk in Nigeria's oil
sector supply chain, a behavioral and buffer-based strategy must be used.
2.2 Theoretical Review
2.2.1 Agency Theory
Agency theory was founded by Jensen & Meckling (1976). According to Luo (2021), the
crucial knowledge about how various players connect in the supply of a product or are
interrupted by geopolitical crises is provided by the theory of agency. The MNCs are the primary
players in Nigeria's gas and petroleum supply chain (Mbah et al., 2021). To finish the many
supply lines, Chowdhury (2022) noted that they enlist the help of contractors, local agents, and
their numerous suppliers. Evans et al. (2021) stated that theories about agencies identify several
entities, including trust, information concealment, asymmetry, and uneven detail. While the
principals want to maximize profit and reduce risk, the agents probably follow their objectives,
leading to an agency dilemma. The techniques used to distinguish the assigned geographic
regions that guide in the support of the dangers beneath are among the manners that add to
the production network's adequacy (George & Renjiith, 2021). Overcompensating and

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motivation programs that precisely match the specialist and chief will cooperate to rouse
specialists to focus on additional significant objectives like gambling the board and functional
effectiveness.
According to Huu Nguyen et al. (2020), effective board of directors, adequate
compensation structures, and regulatory compliance mechanisms must be in place to minimize
agency expenses and ensure that agents are pursuing the goals outlined in the principles.
Gwangwazo & Muazo (2021), state that performance reviews, frequent operations audits, and
transparency requirements as some of the monitoring tools used in the Nigerian oil and gas
sector to track compliance with contractual risk reduction inventories. Geopolitical risks that are
prevalent in the oil and gas industry in Nigeria include; political instability, security threats, and
regulatory reforms, which have their greatest level of effects on supply chain management
(Aroge et al., 2020). Through agency theory, Hemrit (2021) stated the principles and the agents’
responsibilities and risks in contracts relevant to collaboration between these roles on how to
preserve stability for businesses amid uncertainties around geopolitical shifts can be
determined. Besides, agency problems like moral hazard and adverse selection, Koksal & Strahle
(2021) stated that conflicts of interests could also arise amongst players in this supply chain in
the context of applying the theory of agency. The strategies of the supply chain aimed to
dampen the geopolitical risks should be correspondingly to these agency problems via
corresponding means of Contracts depending on performance, information sharing platforms
and stakeholder engagement initiatives that will make the partners to trust each other and
cooperate (Gomez-Mejia et al., 2021).
2.2.2 Contingency Management Theory
Contingency Management Theory was founded by Fred Fielder in the 1960s. According
to Opara & Wahed (2024), the theory posits that no one given scenario might fit the
organizational management as a one-size-fits-all concept, the effectiveness of organizational
management practices could be contingent on the situations in which they are applied or
contingencies facing the organizations. In such a case, the application and understanding of the
contingency theory could be priceless in answering just how the risk landscape in the oil and gas
industry in Nigeria is going to be dealt with (Bello, 2021). Nigeria, being a major oil-producing
country, thus faces exposure to geopolitical risks that may eventually get way too close to the

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affairs of her industries. According to Compaore et al. 2020, some of these risks involve but are
not limited to political instability, social unrest, terrorism, corruption, policy instability, and
conflicts. As per Khan et al. (2022), the application of contingency theories will help the oil and
gas companies in Nigeria develop responses and strategies tailor-made to address those specific
risks.
One of the core principles behind contingency theory is that organizations need to adapt
their management practices given the context. Jumonu (2023), noted that a presentation on a
geopolitical risk case indicates the recognition of the sort of challenges that an environment like
that of Nigeria can pose to developing the tendencies of the PRPs. For example, in the oil and
gas sectors, the companies probably need to strive for social stability by building good relations
with the local community and stakeholder groups, as well as to try substantially to lower the
chance of social disruptions or even uprisings (Beissinger, 2022). As stated by Lehto, (2022), they
can also take special care to protect their staff, business, and infrastructure from acts of
terrorism or sabotage.
Harhausen et al. (2020) noted that contingency theory also emphasizes the importance
of flexibility and the ability to adapt to changing circumstances. In their commitment to doing
the right thing with preparedness of the highest order, Nigerian oil and gas companies have to
engage in constant strategic readjustment within the political and soon-to-change social
landscape. There can be yet other strategic reactions to the uncertainty’s characteristic of
geopolitical risks, such as diversification of operation, investment in other markets, or the
development of contingency planning in the case of an eventuality in the flow line (Dokulil et
al., 2023). According to Kesselring (2024), the element of flexibility contours in uncertain
landscapes where the political risks generate problems. The underpinning philosophy of the
contingency approach is that there is no one best way. Clearly many strategies will be required,
and there developing leadership appears to be no place for a general policy contingent "neither
on issues arising with," nor shall apply to all situations. In the case of the Nigerian oil and gas
industry, James et al. (2023) noted that companies would need to embrace divergent ways to
manage different geopolitical risks. For instance, they will have to ensure they run government
relations alobbying program to ensure they understand the implications in the regulation while

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still implementing the strictest measures against corruption to curb the potential dangers of
corruption in the area. Through tailoring the management of its practices within the specific
risks currently present, the corporation will be placed at a better position of effectively dealing
with the difficult state of affairs in geopolitics (Luo & Assche, 2023).

Smith et al. (2019) in their review "Moderating International Gamble in the Oil and Gas
Industry: “Close Examination of Systems in Agricultural Nations” highlighted the challenges
faced by non-industrial nations, particularly Nigeria, in managing international threats within
the oil and gas sector. The creators involve several factors which further enhance these
difficulties, including political instability, bureaucratic weaknesses, and security risks. Shakiness
in non-industrial nations is often political in nature and is a result of factors, namely civil unrest,
government instability, and leadership changes that create uncertainty and volatility in the
operational environment of oil and gas companies. Additionally, administrative weaknesses
resulting from inconsistent setups, lack of transparency, and corruption aggravate the
challenges faced by companies operating in these areas. Security challenges, aside fear,
insurrection, and injury, poses significant threat to infrastructure and workforce, leading to
disturbances in supply chain operations.

On the other hand, Johnson et al. (2020) provides a different opinion by suggesting that
multinational corporations operating in non-industrialized countries, such as Nigeria, have
effectively implemented supply chain strategies to mitigate global risks. The review showcases
approaches such as widening of suppliers and participation in local network as successful
practices pursued by these companies. Improvement of suppliers helps organizations to reduce
reliance on a single source, thus reducing the impact of global disruptions on the supply chain.
Apart from, interests in neighborhood framework, for instance, creation of safe transportation
roads and design of effective communication networks, improve operational strength and
mitigate security-related risks.

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Geopolitical risks, such as trade disputes and regional conflicts, remain the toughest
testing challenges of supply chains resiliency among the global oil and gas industry, according to
Brown et al. (2018) . Trade in the extracts poses such risks, which cause disruptions to key
supply chain activities, delays in production, bottlenecks in transportation and higher costs for
industry players. For example, trade disputes may lead to tariffs, quotas, or trade barriers that
slow the movement of goods and services across borders, affecting the flow of raw materials,
equipment, and finished products necessary for oil and gas operations. Likewise, regional
conflict can disrupt supply routes, destroy infrastructure, and threaten the safety of personnel,
thus, making logistics management more difficult.
In the contrary, Adbullahi et al. (2020) offered an opposing view by illustrating that the
multinational oil and gas companies in Nigeria have adopted a robust supply chain strategies
that enable them to manage adequately the geopolitical risks and enjoy operational resilience.
Among such strategies are contingency planning and supplier diversification that allow
organizations to forecast and address the consequences of geopolitical disruptions on their
supply chains. Contingency planning includes opportunities creation, alternate route
identification, and response procedures to deal with the potential threats and their negative
effects on activities. On the other hand, supplier diversification implies working with various
suppliers in different locations to eliminate reliance on a single source and improve supply chain
flexibility.
Ibrahim et al. (2020) contend that Nigeria oil and gas firms confront significant
difficulties in developing supply chain resilience, mainly due to geopolitical risks such as
corruption, regulatory uncertainties, and infrastructure deficits. Corruption in the industry
results into inefficiencies, favoritism and irregularities in procurement processes and in so doing
makes the establishment of strong supply chain systems difficult. Regulatory ambiguities that
result from conflicting policies and enforcement practices exacerbate these challenges by
introducing confusion and unpredictability into the business environment. Furthermore, the
lack of infrastructure such as underdeveloped transportation and utilities leads to inefficiencies
in the flow of goods and services within the supply chain, thereby worsening the exposure to
geopolitical risks.

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On the contrary, a different angle is presented by Lawal et al. (2018) by pointing a few
instances of successful supply chain resilience in the oil and gas industry in Nigeria. The research
provides illustrations of practices, including the use of state-of-the-art technology and the
creation of strategic alliances, which allow enterprises to manage geopolitical risks well and
keep operations stable. Utilizing technological advancements such as digital tracking systems
and real-time monitoring tools, companies can increase visibility and responsiveness within
their supply chains and lessen the effects of geopolitical uncertainties. Another set of critical
measures to address geopolitical risks is the development of strategic partnerships with
trustworthy suppliers, service providers and government agencies, facilitating a collaborative
way of risk management and thus, making the organization more resilient to such kinds of
challenges.
Yusuf et al. (2021) argue that Nigeria’s geopolitical risks such as militant attacks on oil
infrastructure and political instability have caused impacts on its oil and gas supply chain. These
hazards lead to disturbances and losses for industry players which affect the production,
transportation, and distribution operations. Militant attacks on oil facilities, including pipelines
and refineries, may result in substantial damage, leading to production interruptions, oil spills,
and financial losses for companies in the area. In addition to that, political instability, which
includes civil unrest, government instability, and regulatory uncertainties, makes the operating
environment to be unpredictable hence more supply chain disruptions in the oil and gas sector.

On the other hand, Adeleke et al. (2019) provide empirical information to show how
Nigerian oil and gas companies have put in place innovative supply chain measures to reduce
the effect of geopolitical risks and the sustainability of operations. The strategies consist of
partnerships with the local communities and security measures investment to safeguard the oil
infrastructure. Partnership with the local community is characterized by constructive
relationship building, the answer to the community’s problems, and opportunities for economic
development which will result in the decrease of attacks from the militants and social
destabilization. About the security measures, the investment in security solutions, for instance,

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security personnel, surveillance systems, and access controls, provides the proper safeguard of
the oil facilities and reduces the risk of sabotage or malicious destruction.
2.4 Research gap
According to Tanui (2021), Nigeria's economy relies intensely upon the discovery and
creation of oil and gas, which likewise produces a significant measure of unfamiliar trade gains
and government income. Babatunde (2020), states that there are other international challenges
that Nigeria's oil and gas area should manage. These dangers can impede operations, influence
yield, and endanger investments (Thompson, 2022). Most of the oil stores are situated in the
Niger Delta region, which is likewise home to political instability, wars, ethnic and strict
pressures and administrative vulnerability. Even though these dangers are recognized, there is a
review shortage in the space of understanding and addressing the specific chain network
techniques expected to diminish international risks in the oil and gas area of Nigeria (Ijeomah,
2020).
Besides, studies such as Geopolitical Stability and Supply Chain Resilience and Local
Content Policies and Supply Chain Localization, Sakib et al. (2021) stated that examining the
impacts of several geopolitical turns of events and arrangements on the working of supply
chains in Nigeria's oil and gas area are required. This can involve looking at contextual analyses
of past disturbances, including political commotion, pipeline detriment, or adjustments to
regulations and guidelines, and assessing the manners by which supply chains the board
procedures were applied to control and decrease these dangers (Zhang et al., 2021).Bridging
this research gap would help partners, industry professionals, and policymakers find out about
productive inventory network arrangements that are fit to Nigeria's specific international
climate (Adewolu Ogwo, 2024). Researchers can assist Nigeria's oil and gas area with building
more manageable inventory chains by overcoming this issue, which would ultimately uphold
provincial financial development and steadiness.
2.5 Chapter Summary
The literature review fills in as an essential investigation of key ideas pertinent to the
exposition's examination of supply chain strategies for moderating geopolitical risk in Nigeria's
oil and gas industry. It starts by clarifying major ideas, for example, the supply chain, covering
the complex web of parties engaged in the industry's creation, delivery, and distribution of

17
goods and services. Simultaneously, the review outlines the complex difficulties of standing up
to oil and gas organizations, going from innovative and functional obstacles to administrative
requirements and international dangers. Geopolitical risk arises as a major subject, representing
the spectrum of political instability, security dangers, administrative changes, and financial
disturbances that essentially influence supply chain management in the Nigerian setting. The
literature review then, at that point, presents theoretical reviews like agency theory, clarifying
the supply chain's principal-agent behavior and contingency theory, underscoring the
significance of different techniques custom-fitted to contextualize oriented factors and
environmental possibilities. Through incorporating existing writing, a research gap is recognized,
featuring the requirement for additional investigation into explicit procedures utilized by oil and
gas organizations to relieve geopolitical risk inside their supply chains. This gap acts as the
dissertation's central focus, directing the creation of the study's goals and the ensuing empirical
inquiry. This chapter gives a complete establishment to the dissertation inquiry, making way for
critical examination and adding to advancing information in this basic space.

CHAPTER THREE: RESEARCH METHODOLOGY


3.1 Introduction
According to Alturki (2021), this section will utilize research onion framework to outline
different philosophies, approaches, strategies, and methodologies used in collecting and
analyzing data. This research centres on primary data collection using questionnaires. Research
onion will be utilized in this chapter (Abdelhakim & Badr, 2021).
Fig 3.1 Research onion

18
3.2 Research philosophy
Positivism, from a philosophical standpoint, holds that reliable knowledge can only be
derived from observable and measurable facts obtained through sensory experience
(Krishnamoorthy et al., 2021). The researcher's only responsibility in positivist studies is to
gather and objectively analyze data. Hair & Alamer (2022) maintained objectivity during the
study by removing their values from the equation. Research findings in positivist studies tend to
focus on observable and quantifiable outcomes. The foundation of positivism is quantitative
data that can be statistically analyzed (Park, 2020). It has been widely used in business and
management disciplines for many years. In Masuku's (2023) view, the positivist view sees the
world as made up of discrete, observable elements and events that interact in a predictable and
determined way. As Towers et al. (2020) point out, the deductive approach is popular in
positivist studies, whereas the inductive one is more likely to be found in phenomenology.
Positivism focuses on facts, whereas phenomenology emphasizes understanding the meaning

19
and incorporating people’s interests (Cuthbertson et al., 2020). Researchers warn that selecting
a positivist approach suggest that the researcher is distinct from their research and that it can
be made purely objective. This means that the researcher will not have a lot of interaction with
the research participants during the study. In essence, studies which are based on the positivist
paradigm put facts in the first place and perceive the world as external and objective (Erciyes,
2020).
Interpretivism is based on the understanding that reality is not an objective, single-
encompassing fact but a complex construction. A range of social down factors has influenced on
these constructs (Gannon et al., 2022). It not only conveys the idea that one cannot understand
someone's discourse unless he or she knows their story too. This story differs based on his/her
experiences of the community or the society (Power & Velez, 2020). During the interpretations,
researchers use particular activities like questioning and observation that might help to uncover
or give a full and deep knowledge of the process under consideration. These particular
techniques go hand in hand with the qualitative data methods of collection. Gertsen & Zølner,
2020, cited in interpretivism are precisely embraced since they highlight the diversity of human
experiences as well as social and historical contexts in which individual agents form their own
perceptions of reality. The theory abandons the idea of a single objective reality that everyone
can grasp and proposes the notion of subjectivity that is more important for the meaning-
making process instead. Through investigating the daily lives of people and analyzing their
views, interpretative researchers seek to obtain a detailed understanding of social and cultural
factors that determine their perception of reality (Gertsen& Zølner,2020). Unlike positivist
approaches that emphasize objective conclusions that come from measurable data,
interpretivism tries to reveal the complexity, and depth of human experiences. In order to seize
specific aspects of people’s subjective realities, methods of qualitative character are used—
interviews, observations, and textual analysis, which help to collect the rich context data
(Akinlar, 2024).
The researcher has used positivism. It is very crucial to find factual data about the
effectiveness of supply chain diversification strategies in mitigating risks and boosting resilience.
It helps to determine whether the strategies put in place in the supply chain are effective or not.

20
Positivism maintains that only knowledge rooted in factual information acquired through
observation, including measurement, can be considered reliable.
3.3 Research Approach
Deductive Approach
The deductive approach is in line with the analysis of existing theories on supply
management, geopolitics, risk, and intersections between them for the oil and gas industry
setup, and the forming of research theories through the application of the theories (Imane et
al., 2024). One of the objectives of this research is to find out how much different supply chain
strategies are going to mitigate geopolitical risk in Nigeria's oil and gas industry (Aroge et al.,
2020a). From the existing theories and analysis in supply chain management and geopolitical
risk studies, the investigation will generate a theory concerning the influence of several
techniques in hardening supply chain resilience and curbing exposure to geopolitical
disturbances, for example, supplier diversification, infrastructural resilience support, and
geopolitical risk evaluation protocols (Althaf et al., 2021). In the deductive approach the
formulation, analysis, and evaluation of the research hypotheses is emphasized that are based
on available theory (Casula et al., 2020). Through applying the relevant literature theories to
research, it is the objective of the study to provide a holistic, as well as comprehensive
knowledge concerning the link between corporate supply chain strategies alignment with
geopolitical risk mitigation in the Nigerian oil and gas sector.
The deduction approach is an appropriate method for studying supply chain strategies of
the oil and gas sector in Nigeria aimed at reducing the harmful effects of geopolitical risk (Aroge
Et al., 2020b). Having this approach provides a systematic roadmap, which relies on available
theories and tools on supply chain management and geopolitical risk analysis to form testable
hypotheses. The strength of the research findings emanates from the fact that they are
anchored on established theoretical knowledge and thus have a good foundation on which the
details that might be even complicated can be understood fully (Baceviciutes et al., 2021).
Besides, the inductive method promotes structured theory testing, hereby, a systematic
evaluation of geopolitical risk mitigation strategies for supply chain management is assured
(Krantz et al., 2021). In this approach, one can derive solid findings from the rigorous analysis of

21
empirical data. One can have helpful suggestions for both theory and practice depending on
these insights.
3.4 Research Strategy
As stated by Mohajan (2020a), using numerical patterns to study psychological, social,
and economic phenomena, the quantitative methodology is the dominant research paradigm in
the social sciences. It comprises several methods, procedures, and presumptions (Dehalwar&
Sharma, 2023). It involves the collection of various types of numeric data, some of which are
inherently quantitative, while others have a numeric structure imposed on them (Goldsmith,
2021). According to Mohajan,(2020b), quantitative data collection allows researchers to
perform a broad spectrum of statistical analyses, from basic to complex, that support data
aggregation (e.g., calculating averages, and percentages, the identification of relationships
between variables, and cross-aggregate comparisons. Quantitative research encompasses
various methodologies, including questionnaires, structured observations, and
experiments(Aithal & Aithal, 2020). Contrary to this, qualitative research uses techniques such
as focus groups, interviews, and ethnographies to gather and analyze narratives and open-
ended observations
With the use of quantitative research techniques, you can get significant data on the
mitigating effect of supply chain diversification strategies in risk management and resilience
within a short period. The researcher utilized quantitative research methods to record the
situations or aspects of people that impact them. The quantitative research strategy is an
unbiased source of data. This may be easily displayed through statistical analysis and numbers
(Ghanad, 2023). This method of storytelling assumes a particular accuracy and quantification of
phenomena, which enables comprehension and interpretation of the findings to be clearer. The
researcher developed deeper insights into the social world by applying a scientific method
which in turn makes it possible to use objective data and statistical analysis to examine and
understand various aspects of human experiences through quantitative research
3.5 Data Collection
While collecting questionnaires were used to gather the quantitative data on the
research to know the supply chain strategies used to mitigate geopolitical risk in the oil and gas
of Nigeria (Olisah, 2023). The questionnaire was structured with close-ended questions with

22
agreement to the aims of the research, clearness, shortness, and impartibility to bring about an
answer with applicable and dependable information (Mangold, 2023). The questionnaire sent to
about a hundred professionals at the administration level involved in supply chain management
consists of a mix of question types and summative scale questions with demographic details. In
addition, the targeted sample of the research is professionals applauding both from the supply
and demand sides of the oil and gas sector in Nigeria specifically the supply chain managers and
other shareholders (Baiye, 2020).On the other hand, in varying the professionals within the
sector, the statistical effectiveness of the study is put into consideration with its aim and
objectives by inferring a sample size. Respective applicable review boards and ethics panels are
approached to seek cases before the conducting of the research (Armold et al., 2021).
Decisiveness, volunteer nature, and the kind of the same assured confidentiality of responses
are brought to the knowledge of the participants in this regard. Their commitment to this bet is
treasured and a kind of permission is taken before actually asking them to participate in the
same (Cahigas, et al., 2023). Before the actual conducting of the research, a pilot test is carried
out by asking multiple persons to roughly be able to identify and correct any problems regarding
the clarity, length, or structure. Date and time deadlines are given according to the type of
research the participators are involved in. The participants of the research will also be managed
with the closed and finalized questionnaire through mail, online polls, or through face-to-face
interviews with the deadline likely to be set on a prior date (Dolan et al., 2023). Quantitative
data analysis follows and could be done on SPSS software. Deductive static analysis is used in
summing up the data for demographics and reinforcement to Likert scale questions. Per
Stapor, (2020), inferential statistics such as regression analysis, or correlation, examine the main
relationships that exist between variables and results with properly derived meaning. All these
results are bagged extensively in tables, charts, and graphs. The data collected for the research
is quantitative and hence the approach can be justified as it assists in the systematic collecting
of numerical facts providing a structured and statistical stand for analysis of supply chain
strategies in the oil and gas industries of Nigeria (Odogun, 2021). Precisely structured questions
helped the researcher in obtaining measurable responses from the professionals in the industry,
which helped in a final understanding of their idea of geopolitical risk mitigation (Kumar & Aziz,

23
2023). The sample for the research of professionals and stakeholders justifies more
applications . In addition, these statistical ways of analyzing the quantitative data helped in
finding patterns, correlations, and trends toward adding prizes within the academic and
practical implications. Additionally, the approach to gathering quantitative data was very strong
and systematic in actualizing the objectives of the research and covering a gap that resides right
now in understanding the supply chain strategies within this unique context of the oil and gas
sector in Nigeria (Dhali et al., 2023).
3.6 Sampling
The study aimed to recruit 150 participants to achieve representativeness as well as
statistical reliability. Taking into account the recommendation of Abdelkader Achaer et al.
(2024), which underscored that at least 100 responses are needed to obtain reliable outcomes,
the sample size for the study was deliberately set higher to give it more robustness. Random
sampling techniques were applied to get the responses, so fairness for choosing participants
and reducing the bias of the quarry will be achieved (Sari et al., 2023). As per Hendren et al.
(2022), the purpose behind the random selection process was to give the representation of
diversity in the industry, thus increasing the reliability and generalization of the research
findings.
According to Denny et al. (2024), once the questionnaire was ready, the questionnaire
was distributed to the selected participants through JISC, which provided an easy access and
effective data collection way. Random sampling methods were employed to attain a sample that
represents all the stakeholders in the oil and gas industry in Nigeria; hence, an in-depth analysis
of supply chain strategies that emphasize risk mitigation due to geopolitical risks can be
conducted.
3.7 Data Analysis
The analytic methods of data mostly depend on the strategy of the collection of the
study and the types of data (Braun & Clarke, 2021). The stage of quantitative data analysis
engaged in this research was very systematic and comprehensive in approach through which a
better and more useful level of inference was extracted from the derived data. Additionally, it
ensured that the quantitative data analysis was very strictly carried out and the linking of the
use of the statistical software largely brought the issue of measurement and control errors to a

24
standstill (Sun et al., 2023).Descriptive statistics was the first applied method to analyze the data
in sequential steps (Sauer &Seuring, 2023). Descriptive statistics is a statistical tool used to
summarize and represent demographic information of the participant and responses of the
participant towards questions put forward using the Summation scale (Hernández Alava et al.,
2023). Descriptive statistics helped in portraying central tendencies and variability with
measures such as the mean, median, mode, and standard deviation. The step has a meaning in
that it gives a shot of the nature and distribution of their responses in a population in which a
sample is attained (Reynolds & McDonell, 2021).
The research showed inferential statistics, and this part aimed to explain relationships
between variables and extend a definitive statement. One of those methods consists of those
that examine the extent to which one variable causes or predicts others, like regression analysis
(Shrestha, 2020). Additionally, regression analysis is most relevant for finding the relationship
among the various supply chain strategy variables and their effectiveness concerning the
mitigation of geopolitical risk (Tarei et al., 2020). It is shown in a significant number of ways,
accurately defining the results produced by the data in question and instructing effective means
of interpretation. Visuals are served mainly to critically examine trends and variations, along
with determining possible correlations that exist between target variables and any other
parameter involved and explained in the statistical analysis (Maal-Bared et al., 2023). Visual aids
included tables, charts, and graphs. Numbers gave clarity to the findings and effectively
communicated to a larger reading audience. It proves to be most helpful when showcasing
general trends and variations, along with determining correlations that exist. Once these
findings are presented, they are interpreted against existing literature and theoretical
frameworks (Younas et al., 2023).

25
The study further looked at the possible connectedness between demographic variables
and the effectiveness of supply chain strategies (Al-Rawashdeh et al., 2023). Additionally, the
analysis paid attention to uncovering whether some strategies worked better among a
demographic grouping, or if there were differences that were accumulated from participants'
roles within the industry. This helped in making the study findings quite detailed, hence making
the results focus more on understanding the varying factors affecting the effectiveness of supply
chain strategies (Aslam et al., 2021).
3.8 Ethical consideration
The qualitative aspects of the research must be carried out under the banner of ethical
research practices which in essence means adhering to the principles of integrity, respect, and
fairness (Gbinde, 2023). The quantitative-based research, focused on collecting data from the
chosen sample, considering the ethical code of conduct (Ichendu, 2020). Preservation of ethical
values is the main goal. The participants were provided with a consent form, which covers the
supporting purpose of the project, objectives, data handling procedures, and usage of
responses (Taherdoost, 2021). Thus, the system of transparency is set forth and the participants
can accurately evaluate their participation, providing evidence that ethic rules for researchers is
the key priority.
The data from the questionnaire includes demographic data, which we will ask them to
fill e.g. email addresses, gender, age, and educational qualification. Attention should be paid to
ensuring participants' replies' confidentiality is crucial, therefore email addresses will be stored
anonymously to make access to information by other people impossible (Morina, 2020).
Personal identifiers are included within the parameters of non-disclosure (Rajoria, 2020).
Besides that, the data gathered are adequately coded with no features that identify individual
respondents; therefore, their integrity, availability, and confidentiality are maintained in the
same way (Gbinde, 2023; Ichendu, 2020). Voluntary and consultative engagement is
guaranteed, and the participant had the right to out at any time they wanted. Besides the
recorded collected responses are completely secured and will not be utilized for financial
purposes. What has been established is a commitment to ethical, legal, and professional
standards in the research dismissing any controversial rumors that may be in existence.

26
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