INVENTORY CONTROL MANAGEMENT AND REVENUE GENERATING CAPABILITIES OF OIL AND GAS DRILLING FIRMS IN NIGERIA
INVENTORY CONTROL MANAGEMENT AND REVENUE GENERATING CAPABILITIES OF OIL AND GAS DRILLING FIRMS IN NIGERIA

Summary/Abstract: The critical role of effective inventory control has been much emphasized inthe oil and gas industry which is subdivided into upstream and downstreamsectors with drilling activities falling within the upstream subsector. In light ofthis development, this study investigates effective inventory control and effectivedrilling activities of oil and gas drilling firms as well as its relationship withrevenue generating capabilities of oil drilling firms in Nigeria. Simple randomsampling technique was adopted. Presentation and analyses of primary datacollected with questionnaires and testing of the hypotheses were done usingpercentage and Spearman’s Rank correlation coefficient. The results from thetests with the use of SPSS show positive and significant correlation betweenineffective inventory management and downtime in the operations of oil and gasdrilling with a correlation value of 0.682 with p-value = 0.001 < 0.05, which Issue 4/201976implies that there is 68% relationship between ineffective management anddowntime drilling. There is a significant correlation between incessant downtimein operations of oil and gas drilling firms and their income level owing to poorlymanaged inventory control with a correlation coefficient value of 0.788 with pvalue = 0.000 < 0.05, which implies that there is 79% relationship betweenincome (profit) level and downtime in drilling operations. Incessant downtime indrilling operations of oil and gas firms as a result of poor inventory controlmanagement has significant difference with termination of contract of oil drillingfirms with the result of the F-cal value as 344.632 while F tabulated value as3.901 leading to rejection of hull hypothesis. Based on the findings, it wasrecommended that oil drilling firms should strengthen their inventorymanagement system for effective and timely work delivery in order to avertdowntime, loss of income and termination of contracts. Finally, members of staffof oil and gas drilling firms in inventory units should be trained and retrained onregular basis to embrace technological changes in inventory management toimprove their performances which would in turn strengthen the inventorymanagement of such firms.

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