The study was
conducted on the Accounting for Human Resources in the oil and gas industry in
Nigeria (A Case Study of Shell Petroleum Development Company of Nigeria).
Different set of
people in the company were interviewed and questioned for the purpose of the
The data were
gathered through the administration of questionnaire to respondents from
different department status in the organization.
The results were
analysed based on a simple percentage and interpreted under discussion of
results. Finding of analysis were used to give recommendation to problems
identified in the study. While the hypothesis were tested using chi-square
method statistical tools for hypothesis testing.
findings conclusions at the study among others are:
of revenue to the company will occur if the department continues in their
current practice of not informing the human resource department about when
their contract staff is on leave so that they would not be paid during such
of revenue to the government will occur, results of 5% withholding tax payment
by the contract staff which is not properly computed by the company.
Title Page i
Table of contents vi
Background of the Study 1
Statement of the Problem 4
Objective of the Study 4
Research Questions 5
Research Hypothesis 6
Significance of the Study 7
Definition of Terms 8
Two: Literature Review
2.1 Introduction 9
2.2 Development of
Human Resources Management 11
2.4. Positions in
2.5. The Current System 24
2.6. The Accounting
2.7. Relevance of this
2.8. Impact of Taxation 26
2.9 Internal Control
and Policies 28
2.10. The People in the
Operating Environment 30
2.11 History of the
Three: Research Methodology
3.1. Introduction 37
3.2 The Area of the
3.3 Sample Size 37
3.4. Sampling Method 38
3.5. Instrument 38
3.6. Validity of the
3.7. Method of Data
3.8. Method of Data
Four: Data Presentation, Analysis and Interpretation
4.1. Introduction 42
4.2. Data Analysis 42
4.3. Hypothesis Testing 59
Five: Summary, Conclusion and Recommendation
5.1. Introduction 69
5.2. Summary 69
5.3. Conclusion 70
5.4. Recommendation 71
1.1 BACKGROUND OF THE STUDY
is well know fact that the Nigeria major sources of revenue is from oil gas
sector of the economy. This account for over 80% of the total revenue generated
by the government in the recent past. the Nigeria foreign resources has increased
tremendously due to the high price of petroleum product all over the world.
This has brought some level of confidence to the foreign investors to invest in
the Nigeria economy and
stability in the exchange rate of the Nigeria currency.
the importance of this sector cannot be over emphasized, it is pertinent to see
that those companies that are engaged in exploration of the crude oil carry out
their activities in an effective and efficient manner.
focus of this research will be based on accounting for human resources in the
oil and gas industry, a case study of shell petroleum Development Company of Nigeria
topic was chosen because of my concern as to determine the treatment being
meted out to personnel in the industry.
research projects is based on the human resources accounting of shell petroleum
Development Company of Nigeria
limited. It focuses at the points highlighted in the proposal. Before I
proceed, would like to present the followings
Structure of the Oil
of the oil in Nigeria
comes form the Niger Delta and six major companies of which SPDC is the
largest. The others are EXXON, Mobil, Chevron Texaco, Agip, Total Fina ELF, and
Texaco. All these operations are joint ventures with the government holding a
majority share of between 55.60 percent, through the NNPC (Nigeria National
National Oil Companies
and its subsidiaries are senior partners in all the major upstream ventures.
They have extensive domestic operations, especially downstream. They own large
reserve of oil and gas and enjoy a monopoly of refining and petrol chemicals.
NNPC depends on the government for fondling and has limited access to
international capital markets.
Major Oil Companies
Exxon, Mobil, Chevron, Agip, Total Fina ELF, Texaco, ESSO, Canoco.
companies operate internationally and have a strong financial hue. They have
considerable technological know how and extensive information networks. They
are commercially and markets driven with strong links to head offices and
sister companies world wide. Their activities in Nigeria usually relate to upstream
Amni, Atlas, Brass, Cavendish, Consolidated, Continental, Dobril, Express,
Famfa, Montorief, Penk, Sommit and others. These are mostly indigenous
companies, but often operating with foreign technical partners. They compliment
the role of the major players and national oil companies.
Service and Supply
Berger, Halliborton, western Alas, Baroid Cameron, Bj Hoghes MI. Drilling
Fluids and others.
companies provide services to the oil industry. They are mainly multinationals
with a strong R & D base and skilled manpower. Nigeria companies are now making
inroads in this sector ,e.g. lonstar Drilling Savsco well services and others.
1.2 STATEMENT OF THE PROBLEM
system list not the names of the contract staff and amounts to be paid to each
and sends same to the cash office where each of the contract staff his or hers
this way, there is no comparison of cumulated payment at the end of each contract
with the agreed contract fee for the period. Through this may be discovered
during audit, the attendant problem of locating the contract staff if he is no
longer in employment is obvious. This study will find a solution to this
(b)How are they remunerated?
The retired staff among them are paid gratitude; transportation, etc whereas
others are not what effects has this on their motivation?
efficient is the rapport (relationship) between the company and his people in
its operating environment? Is there adequate compensation for the use of the
people’s land? Do these compensation actually the reaching the right people?
1.3 OBJECTIVE OF THE STUDY
objective of the study is to address the shortcoming above, by findings a
lasting solution to them.
study is therefore to look at the different accounting methods of payment to
any category staff and compare same with the method in place in the human
resources of shell Nigeria
for direct contract staff payments.
is also meant to determine obedience to accounting laws, rules and regulations
by assessing the internal control measures in place and how the current method
can be audited.
study is also meant to recognize the importance of appropriate taxation by
comparing the current method with normal taxation that should apply and how the
proceeds are being remitted to appropriate authorities.
of fraud, ghost worker(s) or any source of revenue leakage would be highlighted
for possible remedy, in order to avoid occurrence of same. The compensation
methods adopted by the company in setting the people when their lands are
acquired? Is the right channel the one being used? Are these monies adequate?
the conclusion of the study, its recommendations will be able to improve the
current methods where necessary and applicable.
1.4 SIGNIFICANCE OF THE STUDY
about 80% of shell’s total strength of 25,000 employed as direct or indirect
contract staff and only 20% as staff, the relevance of this study can be easily
seen, as a good percentage of the company’s total salary payment goes into this
area each month. As this is also the case in many other companies in the oil
industry, it is significant that documentation of its true position, based on
scientific method, be made. An “employee information” collection of the shell
petroleum development company of Nigeria Limited Explained the above assertion
that 80% of the company total staff strength of 25000 are employed as contract
staff while the remaining 20% are permanent staff.
a scientific study of a scientific system, its relevance is more on its
contribution to human knowledge and development. This study will help to
improve the system already to existence in shell Nigeria and subsequently lead to
efficiency and perhaps effectiveness.
will also block any loophole(s) that might lead to fraud, ghost worker(s)
presence and any source of revenue leakage to the company. With all these and
more in mind, the relevance and significance of the study is not in doubt.
1.5 SCOPE AND LIMITATION OF THE STUDY
This study only tries to point out the benefits of
accounting for human resources, but as already stated this study is not going
to review the accounting of human resources in the Oil and Gas Industry in general,
the study will not concern itself with procedure programmes and the general Accounting.
The study was limited to Shell Petroleum Development
Company of Nigeria within
Lagos metropolis and could be generalized to all the Shell Petroleum
Development Company of Nigeria all over the country.
1.6 RESEARCH QUESTIONS
research questions would be based mainly on the objective of the study and the
short-coming highlighted above.
improper human resources accounting lead to a loss of revenue to the company
resources accounting lead to de-motivation of staff.
is improper accounting loss of revenue to the government
(d) Does crisis in the
operating environment lead to loss of revenue to all.
1.7 RESEARCH HYPOTHESIS
research is based on the following hypotheses.
That improper human resources accounting would not lead to a boss of revenue to the company
That improper human resources accounting would lead to a loss of revenue to the
That improper human resources accounting would not lead to de-motivation of
That improper human resources accounting would lead to demotivation of staff
That improper human resources accounting would not lead to lead to loss of
revenue to the government
That improper human resources accounting would lead to loss of revenue to the
Ho: Crisis in the operating environment
would not lead to loss of revenue to all.
Crisis in the operating environment would lead to loss of revenue to all.
1.8 DEFINITION OF TERMS
Any chemical substance obtained from petroleum oil or national gas.
A factory where a substance such oil is refined (i.e. made pose)
study will analyze the data obtained from the questionnaire administration and interpretation
of results thereof. It will be examined that improper human resources
accounting would lead to a loss of revenue to the company.