EVALUATION OF DISTRIBUTION STRATEGIES IN MARKETING OF PETROLEUM PRODUCTS
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EVALUATION OF DISTRIBUTION STRATEGIES IN MARKETING OF PETROLEUM PRODUCTS
Chapter one
INTRODUCTION
Nigeria’s economy has grown significantly over the years, particularly in the oil business. Her population relied heavily on imported commodities, particularly home supplies. Nigeria is a country that has abundant mineral resources as a gift from nature.
The petroleum industry in Nigeria dates back to the country’s first decade, when a German company began prospecting for oil in the Ararow area of Ondo state.
The first concrete indication that Nigeria is endowed with enormous petroleum resources came in 1956, with the discovery of the Oloibir field, Nigeria’s first commercial oil find. At the time, there was no Nigerian presence at any of the oil well drilling sites.
At the government level, the only vehicle that could have been used in the management of the nation’s oil resources was published to regulate the right to search for, win, and work mineral oils. It is worth noting that the mineral oils act of 1914 was intended to regulate the right to “search” for oil and not much else,
because the 1948 edition of that law effectively limited the right to search for and win oil to British subjects as well as companies with principal places of business in Britain or its dominions and whose chairmen or majority shareholders and directors were British subjects.
This provision of the law (which was not repeated until 1958) was partially responsible for keeping Americans and other nationalities out of our petroleum business until after our independence. As a result, this piece of law helped Shell Bp gain a competitive advantage in Nigeria’s petroleum business.
1.1 Background of the Study
Historically, after determining that the Oloibiri field was commercially viable and that oil could be produced and exported from it within two years, the government responded by enacting the Oil Pipelines Act of 1956, creating a legal framework within which Shell Bp could install and operate the pipeline network for evaluating crude oil from the Oloibiri field.
Two years later, Nigeria’s first crude oil shipment for export was delivered. Other crude oil exports followed steadily, as Nigeria’s petroleum industry expanded dramatically over time. Meanwhile, with the mounting warnings from petroleum that Shell Bp was receiving from Nigeria’s crude oil exports,
it was necessary to establish a separate tax on petroleum from the tax imposed on other corporations in Nigeria. As a result, on January 1, 1958, the Petroleum Profit Tax Act was enacted.
In addition, the government formed a petroleum section inside the Ministry of Lagos Affairs in response to the growing importance of the petroleum industry, which is quickly improving.
This section held primary responsibility at all times, and it developed to become a full department inside the ministry. Later, it was transferred to the Ministry of Mines and Power, and by 1975, petroleum operations and income in the country had grown to the point where the Department of Petroleum was elevated to the status of a full-fledged federal ministry.
In the early 1960s, for example, a huge number of companies, including calf (now chevron) Tenneco, Texaco foreign petroleum company, Philips oil company, Esso exploration, Union Oil, and the Nigeria petroleum scene.
In 1960, Nigeria gained independence from the British colonial, and the government negotiated an arrangement with Shell Bp to develop a refinery in Port Harcourt to cater for the country’s petroleum needs. The Nigeria petroleum refinery company was founded with 50% of its share owned by the government, with Shell Bp owning the balance.
Shell P was named the operator, and the refinery opened in 1965. In response to this growth, the Hydrocarbon Oil Refineries Act of 1965 was adopted to oversee refining operations in Nigeria’s oil industry.
As petroleum’s importance to the economy grew, it was to be expected that, in the absence of a virile articulate and enterprising private sector, the government would continue to work with all its might to enact laws and install structures that would allow the nation to benefit more and more from its growing petroleum resources, which are also improving greatly.
A good example of the outcome of such efforts was the petroleum act of 1969, also known in the industry as the petroleum decree 51 of 1969, which attempted to encompass a large amount of necessary legislation for regulating a much broader range of petroleum operations than any previous legislation.
For example, Petroleum Degree 51 of 1969 addressed issues such as petroleum licence and lease ownership, refining and distribution of petroleum products
the powers and duties of certain government officers, fee and rent royalty payments, and a wide range of aspects of petroleum exploration, development, drilling, and production.
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