Managing Political Risk: Corporate Social Responsibility as a Risk Mitigation Tool – A Focus on the Niger Delta, Southern Nigeria

Abstract

A large proportion of the world’s oil and gas reserves is located in  developing countries where the presence of multinational oil corporations (MNOCs) is high, as host countries often lack the infrastructure needed or are fi nancially unable to conduct extracting operations on their own.  Oil-rich areas in some developing countries pose high levels of political risk for MNOCs as a result of local grievances, paired with environmental degradation and human rights violations by the oil companies. The Niger Delta in southern Nigeria has the presence of MNOCs like Shell, Chevron, Total, ExxonMobil and Statoil. This study investigates how MNOCs can successfully manage political risk by addressing the behaviour of a company through corporate social responsibility (CSR). The study looks at two different MNOCs operating in the Niger Delta: Shell and Statoil.