The impact of stakeholder management on the oil and gas industry in Africa: A case study of oil companies and African host communities

Abstract

The oil and gas industry is regarded as one of the most dynamic, complex and controversial industrial sectors and involves activities that generate a whole range of diverse viewpoints. This has resulted because the industry has several stakeholders who can influence and, at the same time, be impacted upon by activities associated with the value chain of oil and gas oriented business. However, one extremely important stakeholder is the community. Many researchers (Orsini 2016; Wall 2012; Mascarenhas 2011; Kinslow 2014; Boladeras, Wild and Murphy 2016) agree that the viewpoints of communities where oil and gas operations are carried out should be given high priority due to their significant influence over industry activities in their region, as well as the fact that they are the entities most impacted by these activities. This research examined notable conflicts experienced between oil companies and host communities in Africa with the aim to identify means by which relationships between the two aforementioned parties could be made cordial and sustainable. An integrated literature based research method and a case study strategy were adopted for this research. Two frameworks that will support organisations in effectively engaging and establishing cordial relationships with stakeholders were developed by the author; and the key findings of this research are that an effective means of establishing sustainable cordial relationships with host communities in Africa is by involving them in the ownership of operations in their region. This will naturally instill in them some sense of responsibility over the operations, which will in turn enable oil and gas companies to gain the trust, cooperation and support of host communities, as well as the social license to operate in their region. This relationship can be sustained if both parties work collaboratively to determine ways in which benefits from the operations may be maximised.