Impact of Onne Free Zone on Supply Chain Performance of Registered Oil and Gas Companies

Abstract

Despite the Nigerian government's efforts to provide a favourable business environment for its vibrant oil and gas industry through the designation of Onne Port as an Oil and Gas Free Zone, there are alleged irregularities which create operational challenges and add to the cost of doing business in the zone. The objectives of the research focus on evaluating how the existing external business environment in the Onne Oil and Gas Free Zone is affecting the supply chain performance of oil and gas companies. Survey research design was adopted in carrying out the investigation for which performance measurement was based on the parameters of the SCOR® model. The respondents for the study comprise of experienced supply chain, logistics or operations managers of sampled oil and gas companies in the zone. Pearson's Moment Correlation Coefficient was used to test the formulated hypotheses which indicated that positive relationships exist between the present state of the external business environment of the Onne Oil and Gas Free Zone and the basic attributes of the supply chains of registered oil companies. Supply chain strategies to be adopted by oil companies to take advantage of the benefits and incentives available in the zone were recommended. Strategies for involving investors in the improvement of infrastructure, security and tariff regulation in the zone were also developed and suggested for the Onne Oil and Gas Free Zone Authority.

Keywords: Oil and Gas, Free Trade Zone, Supply Chain Performance