ENTERPRISE RISK MANAGEMENT IMPLEMENTATION AND OPERATIONAL PERFORMANCE IN THE PETROLEUM INDUSTRY: A GOVERNANCE PERSPECTIVE

Abstract

The Nigerian Government’s preoccupation for good governance in the oil and gas sector has been pronounced since the return of civil democratic dispensation in 1999. This initiative has driven the implementation of reforms in the petroleum downstream sector for improved service delivery. However, there has been little transformation in the area of risk management as one of the critical areas of reforms on good governance for enhanced service delivery. This paper presents an exploratory study on risk management implementation based on the COSO 2017 Enterprise Risk Management-Integrating with Strategy and Performance as a workable framework for risk-based governance in the Petroleum Equalisation Fund (Management) Board (PEFMB) and its successor agency, Nigeria Midstream Downstream Petroleum Regulatory Authority (NPRA). The research methodology employed was the literature survey approach anchored on a case study research design. The major findings of the study indicated that the PEFMB lacks a befitting integrated risk management framework for executing a seamlessly coherent, risk-based strategy to achieve its corporate mission and vision. This outcome suggests that entrenching and implementing corporate-wide risk management initiative would help minimise the organisation’s operational and non-operational risk elements and also to optimise on new frontiers of opportunities in the liberalised downstream sector of the petroleum industry in Nigeria in the post Petroleum Industry Act 2021 era. This would invariably lay a solid foundation for improved risk-based governance for enhanced operational performance of the Board and its Successor, the NPRA and for excellent service delivery in the Nigerian oil and gas sector.