Improving financial risk management in the petroleum industry of Nigeria

Petroleum companies are critical to the Nigerian economy, as the petroleum sector is the biggest earner and spender of foreign exchange and the highest employer of labour. The industry is however faced with challenges of unprecedented fluctuation of commodity prices, exchange rates, a series of divestments, host communities’ demands, oil theft, project shelving, and destruction of infrastructure. Workforce cutting and consolidations are also the order of the day and current financial risk management (FRM) systems in companies appear not to be working. FRM systems in Nigerian petroleum companies have failed because risk managers did not have one generally accepted framework to manage financial risks such as fluctuations in commodity prices, exchange rates, interest rates, and in the demand and supply of crude oil and gas. There was a need for an integrated framework that is more descriptive and that does not rely only on mathematical models, separate management of each financial risk, and specific focus on the downside risk and derivatives. Mathematical models have presented weaknesses in the identification of issues, dissemination of information, policy formulation, planning, type and the institution of risk culture or delimitation of authority and in responsibility through the organisational structure. Mathematical models could not fully reduce the identification, communication, structure, and environmental scanning of FRM to mathematical models. The present study was the first attempt at an FRM framework that integrated all the financial risks strategically and took into consideration all the critical success factors that can solve the problems and challenges facing the Nigerian petroleum companies in the long term. The primary objective of the study was therefore to develop an FRM framework for the petroleum industry of Nigeria. The study collected data using a mixed methods approach to generate quantitative and qualitative data regarding financial risks facing the petroleum industry and possible methods of managing these risks effectively. The final sample consisted of 70 top-, middle- and lower-level managers, as well as five experts in the industry. Questionnaires were administered to practitioners in the south-eastern and south-western regions of Nigeria, and semi-structured interviews were conducted with financial risk management experts in the petroleum industry. Descriptive and inferential statistics were used in analysing the data. The study succeeded in developing a framework that: provides a thorough understanding and proper evaluation of the most important financial risks petroleum companies face; identifies the type and extent of top management support needed in a strategic FRM system; identifies and operationalises the financial risk culture that should be fostered to achieve FRM success; identifies the organisational structure that supports the successful achievement of FRM; identifies and operationalises the organisation communication flow that supports the successful achievement of FRM; identifies and operationalises oversight and control to support the successful achievement of FRM; and specifies the amount of training that supports the successful achievement of FRM. By implementing this framework, petroleum organisations in Nigeria will go a long way in successfully managing financial risks in that industry

The Impact of Financial Risk Factors on Key Performance Variables in the Nigerian Petroleum Industry

The Nigerian petroleum industry is central to the sustainability of the economy of Nigeria as it is the greatest contributor to Gross Domestic Product (GDP) and foreign exchange. The recurring nature of price risk and other financial risks in the petroleum industry suggests that uncertainty, driven by oil and gas price changeability, causes incessant apprehension to all stakeholders who suggest a need for effective management if sustainability of the industry is to be achieved. Risk management is said to be in a rudimentary stage in Nigeria and, at best, evolving. Previous literature in this area mostly focuses on the impact of each risk on the company's stock and exporting countries' economies. Research on integrated financial risks’ impact on key operational variables in the Nigerian petroleum industry is scarce. This study was, therefore, conducted to fill that gap by contributing to the literature on financial risk management. It examined the impact of financial risk factors on key performance variables, such as profitability, cash flow, the cost of doing business, workforce cutting and project shelving in the Nigerian petroleum industry. This study adopted a mixed-method research design with a philosophical stand, which is associated with the pragmatism paradigm. Qualitative and quantitative data were collected by conducting semi-structured interviews with five senior management staff and distributing questionnaires to 70 financial risk managers. Descriptive and inferential statistics, such as the Pearson correlation coefficient, were used to determine the significance of the relationship. These results indicated that there was a significant relationship between financial risk factors and key performance variables such as profitability, cash flow and the cost of doing business at a value of P<0.05. These results are important to the financial risk managers and stakeholders of the industry as it will help them understand how to manage their exposure for sustainability. Keywords: Nigerian Petroleum Industry, Financial Risks, The Impact of Financial Risks, Exchange Rate Exposure and Price Risk Exposure DOI: 10.7176/EJBM/12-14-10 Publication date:May 31st 202

Work Environment and Employee’s Commitment in Three Selected Institutions in Rivers State

The aim of this study is to investigate work environment and employee’s commitment in three selected Institutions such as Rivers State University, University of Port Harcourt and Ignatius Ajuru University of Education in Port Harcourt, Rivers State. For the purpose of this study, descriptive research design was used. Simple random sampling technique was respectively used to select the respondents for the study. Respondents for this study were fifty (60) made up of twenty-five (35) senior staff and twenty-five (25) junior staff. Structured questionnaires were used for data collection. The study findings indicate that, organization working environment had an impact on members as far as respondents are concerned. The study also revealed that employees’ will improve their performance if the problems identified during the research are tackled by the management. The problems are flexibility of working environment, work noise distraction, supervisor’s interpersonal relationship with subordinates, presence of job aid, the use of performance feedback and improve of work incentives in the organization so that to motivate employees to perform their job. In conclusion based on the findings the study recommended that, the organization needs to have periodic meetings with employees to air their grievances to management and serve as a motivating factor to the employees. Management should find ways and means of communicating their goals and strategies to their employees in order to achieve what the organization is in business for, its mission and vision

An approximate solution of the MHD Falkner-Skan flow by Hermite functions pseudospectral method

Based on a new approximation method, namely pseudospectral method, a solution for the three order nonlinear ordinary differential laminar boundary layer Falkner-Skan equation has been obtained on the semi-infinite domain. The proposed approach is equipped by the orthogonal Hermite functions that have perfect properties to achieve this goal. This method solves the problem on the semi-infinite domain without truncating it to a finite domain and transforming domain of the problem to a finite domain. In addition, this method reduces solution of the problem to solution of a system of algebraic equations. We also present the comparison of this work with numerical results and show that the present method is applicable.Comment: 15 pages, 4 figures; Published online in the journal of "Communications in Nonlinear Science and Numerical Simulation

Reinforcement of AA1237 with Al2O3 to form Metal Matrix Composite

The fabrication of advanced materials which possess an array of desired properties is a significant accomplishment of humanity. Composites are described as enhanced materials as they possess various advantages over conventional materials, which is why these composite materials are seen as viable alternatives in diverse engineering fields such as the aerospace, electronics and automobile industries. This work involved the fabrication of a metallic composite with the use of aluminium (AA1237) and crushed Al2O3 ceramic particles of 150nm and 600nm sizes as the reinforcement. The manufacturing of these composite samples was accomplished using the liquid phase process of stir casting, and they were subjected to various mechanical and electrical tests. For both hardness and tensile tests, the specimen Al/Al2O3/10p/150nm ( 10 per cent) had the highest values with 14.9 HBS and 124.41 MPa respectively. The electrical conductivity test affirmed the presence of non-conductive ceramic particles in the composite samples as the control (AA1237) had the highest conductivity value

Reinforcement of AA1237 with Al2 O3 to form Metal Matrix Composite

The fabrication of advanced materials which possess an array of desired properties is a significant accomplishment of humanity. Composites are described as enhanced materials as they possess various advantages over conventional materials, which is why these composite materials are seen as viable alternatives in diverse engineering fields such as the aerospace, electronics and automobile industries. This work involved the fabrication of a metallic composite with the use of aluminium (AA1237) and crushed Al2O3 ceramic particles of 150nm and 600nm sizes as the reinforcement. The manufacturing of these composite samples was accomplished using the liquid phase process of stir casting, and they were subjected to various mechanical and electrical tests. For both hardness and tensile tests, the specimen Al/Al2O3/10p/150nm ( 10 per cent) had the highest values with 14.9 HBS and 124.41 MPa respectively. The electrical conductivity test affirmed the presence of non-conductive ceramic particles in the composite samples as the control (AA1237) had the highest conductivity value

Mathematical modelling of nonlinear thermal radiation effects on EMHD peristaltic pumping of viscoelastic dusty fluid through a porous medium duct

Biologically-inspired propulsion systems are currently receiving significant interest in the aerospace sector. Since many spacecraft propulsion systems operate at high temperatures, thermal radiation is important as a mode of heat transfer. Motivated by these developments, in the present article, the influence of nonlinear thermal radiation (via the Rosseland diffusion flux model) has been studied on the laminar, incompressible, dissipative EMHD (Electro-magneto-hydrodynamic) peristaltic propulsive flow of a non-Newtonian (Jefferys viscoelastic) dusty fluid containing solid particles through a porous planar channel. The fluid is electrically-conducting and a constant static magnetic field is applied transverse to the flow direction (channel walls). Slip effects are also included. Magnetic induction effects are neglected. The mathematical formulation is based on continuity, momentum and energy equations with appropriate boundary conditions, which are simplified by neglecting the inertial forces and taking the long wavelength and lubrication approximations. The boundary value problem is then rendered non-dimensional with appropriate variables and the resulting system of reduced ordinary differential equations is solved analytically. The impact of various emerging parameters dictating the non-Newtonian propulsive flow i.e. Prandtl number, radiation parameter, Hartmann number, permeability parameter, Eckert number, particle volume fraction, electric field and slip parameter are depicted graphically. Increasing particle volume fraction is observed to suppress temperature magnitudes. Furthermore the computations demonstrate that an increase in particle volume fraction reduces the pumping rate in retrograde pumping region whereas it causes the opposite effect in the co-pumping region. The trapping mechanism is also visualized with the aid of streamline contour plots. Increasing thermal radiation elevates temperatures. Increasing Hartmann (magnetic body force) number decreases the size of the trapping bolus whereas the quantity of the does not effected. Conversely increasing particle volume fraction reduces the magnitude of the trapping bolus whereas the number of trapped bolus remains constant

The influence of red blood cells (erythrocytes) and magnetic field on blood flow in the cardiovascular system

The present study considers the steady, laminar and axially symmetrical flow of blood through an artery provided with a mild stenosis under the influence of an externally applied homogeneous magnetic field. Assuming that blood has small electrical conductivity coupled with the Boussinesq approximation, the leading equations are solved using Frobenius method. Expressions are obtained for the flow velocity, the wall shearing stress and the volumetric flow rate. The effect of the radiative heat is discussed quantitatively. Our results show good agreement with previously reported works

Unsteady hydromagnetic free convection flow of a dissipative and radiating fluid past a vertical plate with constant heat flux

The effect of thermal radiation absorption on an unsteady free convective flow past a vertical plate is studied in the presence of a magnetic field and constant wall heat flux. Boundary layer equations are derived, and the resulting approximate nonlinear ordinary differential equations are solved analytically using asymptotic technique. A parametric study of all parameters involved is conducted, and a representative set of numerical results for the velocity and temperature profiles as well as the skin-friction parameter are illustrated graphically to show typical trends of the solutions

Unsteady two-dimensional flow of a radiating and chemically reacting MHD fluid with time-dependent suction

805-810The study considers the problem of unsteady two-dimensional, laminar, boundary layer flow of a viscous, incompressible, electrically conducting fluid along a semi-infinite vertical plate in the presence of thermal and concentration buoyancy effects. A time-dependent suction is assumed and the radiative flux is described using the differential approximation for radiation. Asymptotic series expansion about a small parameter e, is performed to obtain the flow fields. Our results show that when the thermal and solutal Grashof numbers increase, the thermal and concentration buoyancy effects are enhanced and so the fluid velocity increases. Furthermore, when the Prandtl and Schmidt numbers increase, the thermal and concentration levels decrease resulting in reduced fluid velocity. We, further, found that the skin-friction coefficient increases due to increase in the thermal and concentration buoyancy effects, while it decreases as a result of increase in the Schmidt number. The Nusselt number decreases as the Prandtl number increases just like the Sherwood number decreases with increase in the Schmidt number. These results are in good agreement with results from the literature