University of Plymouth PEARL https://pearl.plymouth.ac.uk 04 University of Plymouth Research Theses 01 Research Theses Main Collection 2018 Supply Chain Management and Logistical Considerations in Distributing Crude Oil from Nigeria to China Shiwoku, Mervyn Olakunle http://hdl.handle.net/10026.1/11489 University of Plymouth All content in PEARL is protected by copyright law. Author manuscripts are made available in accordance with publisher policies. Please cite only the published version using the details provided on the item record or document. In the absence of an open licence (e.g. Creative Commons), permissions for further reuse of content should be sought from the publisher or author. Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognise that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author's prior consent. Signed : _____________________________ M.O.O.Shiwoku 1 SUPPLY CHAIN MANAGEMENT AND LOGISTICAL CONSIDERATIONS IN DISTRIBUTING CRUDE OIL FROM NIGERIA TO CHINA by MERVYN OLAKUNLE OLAJIDE SHIWOKU A thesis submitted to University of Plymouth in partial fulfilment for the degree of DOCTOR OF PHILOSOPHY Department of International Shipping, Logistics and Operations Plymouth Business School March 2018 2 Abstract Mervyn Olakunle Olajide Shiwoku Supply Chain Management and Logistical Considerations in Distributing Crude oil from Nigeria to China The evolution of supply chain management has made significant and continu- ous contributions to logistical processes. This is highly relevant to crude oil lo- gistics in Nigeria, because both indigenous and multinational oil companies who distribute crude oil from Nigerian ports are yet to adopt an integrated export lo- gistics operation. Besides, the study explores the philosophy of supply chain management applying theoretic frameworks of supply chain process manage- ment, demand variability, and vertical integration to encourage integrated export logistics for the distribution of crude oil from Nigeria to China. In addition, the research objectives are: to identify the components of crude oil exports; to re- view the principles of integrated supply chain management; to analyse crude oil demand in China; to evaluate the efficiency of oil distribution, and to propose strategies that will raise the efficiency of crude oil exports to China from Nigeria. A conceptual model was developed to identify relevant issues that guide the synergy of China’s requirement for energy security and Nigeria’s crude oil sup- ply capability. Also, both a Delphi survey and an archival research method’s were adopted to elucidate on the characteristics of the research population, the shipment frequencies between the two countries, and the sources of competing crude oil exports to China. Measures of central tendency from respondent feed- back and non-parametric tests support the study’s findings. Furthermore, rec- ommendations for strategic, operational, and tactical organisation of resources were identified to raise integrated crude oil export efficiency from Nigeria to China directed by the theoretic framework. Moreover, their implications for sus- tainable logistics practice in the short, medium, and long-term are considered. Finally, it was found that adopting vertical integration in a crude oil supply chain will ensure responsiveness to support export efficiency, and enhance the geo- graphic characteristics of Nigeria for increased export shipments to China. 3 Contents Copyright Statement ........................................................................................... 1 Abstract ............................................................................................................... 3 Contents ............................................................................................................. 4 List of Tables ...................................................................................................... 9 List of Figures ................................................................................................... 10 List of Abbreviations ......................................................................................... 12 List of Codes ..................................................................................................... 16 Acknowledgements ........................................................................................... 18 Authors Declaration .......................................................................................... 19 Chapter 1: Background of the Study ................................................................. 20 1.1 Introduction ....................................................................................................................... 20 1.2 Research Background ........................................................................................................ 20 1.3 Research Aims and Objectives ........................................................................................... 24 1.3.1 Research Aims ............................................................................................ 27 1.3.2 Research Objectives ................................................................................... 29 1.4 Research Methodology ...................................................................................................... 30 1.4.1 Research Framework .................................................................................. 35 1.5 Thesis Structure ................................................................................................................. 37 1.6 Discussion .......................................................................................................................... 41 Chapter 2: Literature Review: Theoretical Assessment .................................... 43 2.1 Introduction ....................................................................................................................... 43 2.2 Supply Chain Characteristics: Nigerian Crude Oil Exports ................................................. 47 2.3 Supply Chain: Ontology ..................................................................................................... 50 2.4 Organisation: SC Structures, Concepts, and Orientation .................................................. 55 2.5 Vertical Integration: SC Performance Measurement ........................................................ 65 2.6 Demand Variability: Logistics Operations Planning ........................................................... 70 2.7 Discussion .......................................................................................................................... 72 Chapter 3: Literature Review: Synthesis of China’s Crude Oil Demand and Nigeria’s Crude Oil Supply Capability ............................................................... 76 3.1 Introduction ....................................................................................................................... 76 3.2 China: Sustainability of Crude Oil Demand ........................................................................ 77 3.3 China: Energy Security ....................................................................................................... 80 3.3.1 China: Supply Diversification ....................................................................... 81 3.3.2 China: Environmental Protection ................................................................. 82 3.3.3 China: Policy makers .................................................................................. 83 4 3.4 China’s Demand Variability: Logistical Improvements ..................................................... 85 3.5 Nigeria’s Crude Oil Supply Capability ................................................................................ 89 3.5.1 Nigeria: Petroleum Legislation .................................................................... 93 3.5.1.1 Petroleum Industry Bill: Operations Transparency ............................................. 94 3.5.1.2 Petroleum Industry Bill: Upstream Investments................................................. 95 3.5.1.3 Petroleum Industry Bill: Environmental Issues ................................................... 96 3.5.2 Nigerian Petroleum Reform: Organisational Implications ............................ 97 3.6 Measuring Nigeria’s Competitiveness: SCPRO .................................................................. 99 3.6.1 Primary Factors: Factor Driven Economy .................................................. 100 3.6.2 Secondary Factors: Efficiency Enhancers ................................................. 104 3.6.3 Tertiary Factors: Innovation and Sophistication Elements ......................... 108 3.7 Nigeria’s Logistics Operation: Demand Variability.......................................................... 108 3.7.1 Logistical Considerations: Supply Adequacy ............................................. 111 3.7.2 Distribution Security: Socio-Economic and Political Audit.......................... 112 3.8 Nigeria’s Logistics Development: Vertical Integration .................................................... 114 3.9 Discussion ........................................................................................................................ 118 3.9.1 Archival Research (6 Month Study) ..........................................................