The Effects of Environmental Cost on Oil and Gas Performance in Nigeria (A Study of Mainland Oil and Gas Company, Calabar)

The oil and gas industry significantly contributed to Nigeria’s economic growth. However, it resulted in considerable environmental damage, especially in the Niger Delta. These environmental costs encompassed expenditures related to oil spills and various other factors. This study investigated the influence of environmental costs on the performance of the oil and gas sector in Nigeria, specifically assessing their effects on profitability, operational efficiency, and corporate reputation. The research question was: In what manner did environmental costs affect the performance of the oil and gas sector in Nigeria? The investigation was initiated due to the insufficiency of research on this subject. The research employed a mixed-methods methodology. Quantitative data were obtained from the annual reports of leading Nigerian oil and gas companies, whereas qualitative data were collected through comprehensive interviews with industry stakeholders. Government reports and independent environmental assessments were also employed. The key terms in the study comprised “environmental costs,” “corporate social responsibility (CSR),” “regulatory compliance,” “profitability,” and “operational performance.” The selected sample concentrated on leading oil companies in Nigeria. The collected data were analysed utilising SPSS (Statistical Package for Social Sciences) and thematic analysis. Hypotheses were assessed utilising ANOVA (Analysis of Variance). The findings demonstrated that continuous environmental stewardship was associated with improved operational performance and profitability. Regression analysis confirmed a positive correlation between increased environmental expenditures and enhanced financial performance for companies that invested in sustainable technologies and practices. Qualitative findings indicated that regulatory pressures and legal actions forced companies to prioritise environmental concerns in their operational strategies. The study highlighted the detrimental socio-economic effects of environmental degradation on local communities, which compromised corporate reputations and operational stability. This study augmented the current literature regarding the relationship between environmental management and corporate performance in developing economies, particularly in the oil and gas industry. The results emphasised the importance of integrating environmental costs into business strategies to enhance long-term profitability and operational resilience. The study recommended increased governmental regulation and enforcement to require oil and gas companies to consider environmental costs and suggested an analysis of the effects of technological innovations on reducing these costs.