Economy Functioning over Twelve Months Oil and Gas

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The best functioning of Nigeria’s economy that is not oil-based helped. The economy stay out of a significant slowdown in 2009 and grew by 4.9 percent. As in comparison to the rate of 4% in 2008. In April of 2010, the International Monetary Fund (IMF) projected growth of 7.3 percent. And 7.3 percent for Nigeria in 2011 and 2010 respectively and stated the country’s economy is growing more quickly than the IMF had expect.

The forecasts are base in the hope that prices for oil will remain relatively stable while the world economy improves. And on the assumption that the truce between militants within the Niger Delta holds. In the past, militants have attack oil infrastructure. As well as kidnappings of oil workers have reduce exports dramatically in the past.

The reserves of foreign currency in Nigeria had drop to US$40.67 billion in March. Which was down from US$42.4 billion as of the close of 2009 and US$52.7 billion as of the year 2008. Nigeria has pay around US$3 billion of its oil windfall savings to three levels of government between February and March of 2010. Which led to the loss of its foreign reserve of exchange.

The decline in the economy of Nigeria, particularly in the last 20 years. Thus it is evident in the amount of per capita income that was US 11,000 in 1965. It had fall to US $300 in 1998. In just eighteen years Nigeria has gone from being middle-income low country and one of the top fifty nations in the world, to one of the 30 least develop countries.

The Nigerian legal system is found upon English common law Islamic Shariah law, as well as traditional law

2.1 CULTURAL CONDITIONS

The business sector is an integral aspect of culture, and both affect the other. Social-cultural environments refer to the influence exerted by specific cultural and social factors that are outside that of the management unit. Such influences include mind to work, family system, belief, languages, traditions, favourites, custom, respect system, business ethics etc. Changes in the cultural environment such as education can affect the way of life and the way of thinking of people who live in the society, thereby impacting business operations within the society. Yuri Shafranik

The management of the issues caused by cultural differences is a major factor in the costs involved in conducting international business. In the end, if there are cultural differences between prospective trading partners are substantial in size, the economic or strategic advantages of participating in business activities must be sufficient to offset the additional cost of doing business’ in a different culture.

But, taking the significance of cultural considerations for business in mind, making plans to conduct any business within Nigeria’s Nigerian petroleum and natural gas sector requires a thorough examination of certain cultural considerations as follows:

Niger-Delta region

Traditions and family systems the oil and gas industry are common in the Niger-Delta region of Nigeria, as the largest oil wells can in rural regions in the area. Chevron is the third largest oil company in Nigeria and one of the biggest investors, investing over $3 billion each year. Chevron as a major participant in the industry is in serious negotiations with traditional institutions within host communities prior to the start of explorations into oil.

Religious beliefs: Nigeria includes Christianity along with Islam as the two important religions. These religions, however, are not a significant influence on the consumption of petroleum and gas-related products in Nigeria.

The language: English is the representative language of Nigeria. The country is made up of various ethnic groups and many languages. Three major three languages (Hausa, Ibo, and Yoruba) are used in a broad sense. However, there is a third language “Pidgin English” is prominently use throughout the nation as it is the most effective method for the uninitiated to communicate. This could a significant impact for Des Plc as German is the most spoken language of Germany. Many stakeholders within those in the Nigerian hosting communities for gas and oil comprehend only “Pidgin English.”

3.1 MARKET PATER IN GERMANY

Germany is among the members of the European Union (EU) and an official participant in the WTO. The WTO has one single trade policy. It tends to highlight the possibility of profiting from its “Collective” nature of the community’s membership to increase the pressures on political leaders trigger through WTO sanction sanctions. This is a reality and has been note the community’s trade patterns. However, the final Machiavellian strategy could be to specifically target states of the WTO that are not benefited by the WTO-incompatible measure of the community and would prefer to remove or altering it.

Changes in the German trade pattern in recent times have been generally favourable to the use of the mark internationally. Deutsche mark in a variety of ways. For one, Germany is now the largest exporter to the rest of the world, exceeding the USA in 1986 and expanding the role of this mark in the role of an invoice vehicle. Many German imports comprised the raw materials, particularly gas and oil coming from Russia and most German exports were manufactured products. Then between the years 1986 and 1989 the percentage of manufactured goods relative to exports totals increased between 38 and 47 percent.

3.2 A EXCHANGE PATTERN IN NIGERIA

Nigeria has always demonstrate its determination to improve its business environment to be more integrated with the international economy. But gas and oil were the major source of Nigeria’s exports. It is believe that the United States is Nigeria’s largest trading partner following that of the United Kingdom. Nigeria is the main supplier of approximately 11 percent of US imports of oil and 4.5 percent of German imports. Crude Oil and LNG liquefied (LNG) are responsible for 98% of the exports and about 80% of government revenues.

3.3 The DESIGN of commerce between Germany and NIGERIA

Nigeria as well as Germany maintain a stable trade relationship over time. Recent trade data (2007) indicate that Nigeria’s exports to Germany total 911,5 million Euro. Which is a drop of 35% when compared to the year 2006. The imports into Germany have been up 10%, to reach 1083,3 million Euro.

In 2006, trade figures were favourable to Nigeria and its exports to Germany of 1402,6 million Euro. As well as imports to Germany in the amount of 973,9 million Euro. The difference in trade figures is mostly due to the lower exports of oil to Germany and the higher number of imports of semi-finished products.

3.4 OCCUPATION in the OIL and GAS industry

Britain was the main benefit of Nigerian oil during the initial period of the colony’s oil industry. After Independence, Nigeria expanded its export to countries that included Western European nations, especially Germany and the United States.

But the presence of Germany in the Nigerian energy and oil sector has decreased over time. As previously stated, in 2006, trade figures were favourable to Nigeria. Its exports to Germany in the amount of 1402.6 million Euro as well as imports to Germany total 973.9 million Euro. The differing trade figures in 2007 is mostly due to the lower exports of oil to Germany. Yuri Shafranik

3.5 GUARDS AND RESTRICTIONS ABOUT the exchange in NIGERIAN

Prior to economy reforms, Nigeria’s trade policy was seen as complicate in its restrictiveness, opaque, and unclear. After the introduction of the structural adjustment programme (SAP) that was implement in the year 1988. The adoption of a seven-year tariff plan was adopt that significantly decrease the tariffs of average. But additional tariff adjustments were introduce, usually due to pressure from the domestic lobbyists.

In 1978 the federal government implement policies regarding import bans that prohibit certain products consider crucial to the economy. That require protection for infant industries. But prior to the current economic reform, Nigeria maintain a complex tariff structure that include 19,146 lines. That had tariffs ranging between 2.5 to 150 percent. Nigeria has liberalize its import tariffs in using its Common External Tariff (CET) of the Economic Community of West African States.

3.6 RE-STRUCTIONS in the NIGERIAN Industry

Petroleum and gas operations began in Nigeria effective in 1956. And the first commercial discovery was made in the year of the company then called Shell D’Arcy. Earlier to November 1938, Nigeria was cover under concessions grant to Shell D’Arcy company to investigate petroleum resources. Shell’s dominant position Shell as a player in this aspect of the Nigerian oil industry was in place for a long time. So, up to Nigeria’s inclusion in the Organisation of Petroleum Exporting Countries (OPEC) in 1971.

The country took more control over its gas and oil resources as per the practices of countries that are participants in OPEC. The time of the transition saw the creation of National Oil Companies (NOCs) across OPEC member nations. That were form with the sole purpose of observing the stakes of oil producing countries in the extraction of the resources. While in certain OPEC member nations, the NOCs had direct control over operations in production. However, in Nigeria NOCs were allow to control production operations in Nigeria. Multinational Oil Companies (MNOCs) were allow to continue these operations under Joint Operating Agreements (JOA). Thus that clearly defined the stakes of the firms and Nigeria’s Government of Nigeria in the projects.

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