This thesis empirically investigates how well the Nigerian National Petroleum Corporation (NNPC) ensures value for money (VfM) in its exploitation of Nigeria’s oil resources. This focus on VfM distinguishes the study from other researches carried out on the performance of national oil companies (NOCs) where the common approach in the literature has been to assess performance using the metrics applicable to private oil companies. The rationale for the new approach is that the NNPC is a quasi-public sector organisation and thus its performance should be measured in the same way as that of public sector bodies and state owned enterprises (SOEs). Informed opinions on NNPC’s management roles in Nigeria’s oil and gas upstream sector were sought from a range of relevant experts in twelve stakeholder groups involved in oil and gas upstream operations. Data were collected through the use of questionnaire and interview surveys, and further subjected to statistical analysis to determine and assess significant differences in views between respondent groups. The empirical results obtained from the questionnaires were used to draw a conclusion on the hypotheses formulated for the study. Furthermore, the findings of the interview survey were used to validate the conclusions drawn. The study revealed that the NNPC was perceived to be deficient in keeping its mandate of adding value to Nigeria’s hydrocarbon resources. In specific terms, the respondents were of the view that NNPC has not been able to ensure VfM in its operations because of defects in its organisational structure, administrative system, and accountability. External factors such as political interference, instability and an inappropriate legal framework against which NNPC operates have also been perceived to impede the corporation’s performance. The main conclusions were: firstly, it is argued that the use of conventional private sector metrics to evaluate the performance of NOCs makes it difficult to form an appropriate view on their performance. Secondly, NOCs with numerous conflicting roles as is the case with NNPC are unlikely to achieve satisfactory performance. Thirdly, the NNPC lacks the capability required to ensure multinational oil companies’ (MOC) conformity with operational provisions and best practice. Finally, the thesis concludes that establishing a standardised performance/benchmarking framework is an essential requirement to ensure value addition, VfM and accountability in Nigeria’s oil and gas operations.

Allocating production volumes across a portfolio of producing assets is a complex optimization problem. Each producing asset possesses different technical attributes (e.g. crude type), facility constraints, and costs. In addition, there are corporate objectives and constraints (e.g. contract delivery requirements). While complex, such a problem can be specified and solved using conventional deterministic optimization methods. However, there is often uncertainty in many of the inputs, and in these cases the appropriate approach is neither obvious nor straightforward. One of the major uncertainties in the oil and gas industry is the commodity price assumption(s). This paper investigates this problem in three major sections: (1) We specify an integrated stochastic optimization model that solves for the optimal production allocation for a portfolio of producing assets when there is uncertainty in commodity prices, (2) We then compare the solutions that result when different price models are used, and (3) We perform a value of information analysis to estimate the value of more accurate price models. The results show that the optimum production allocation is a function of the price model assumptions. However, the differences between models are minor, and thus the value of choosing the “correct” price model, or similarly of estimating a more accurate model, is small. This work falls in the emerging research area of decision-oriented assessments of information value. / text