Evaluating the Relevance of Community Engagement and Stakeholders Relationship in Oil and Gas Sector

Abstract

The oil and gas industry is a very dynamic and interest agitating industrial sector and involves several activities that may be perceived differently from several perspectives that may include social, political, legal, environmental, technological, economic and commercial viewpoints. All these reflect an industry which has several stakeholders and their interests can also be viewed through the aforementioned perspectives. In the dynamic landscape of this industry, effective community engagement and stakeholder relationship management stands as a cornerstone for sustainable operations, strategic decision-making, and fostering positive societal impact. Its relevance is paramount for oil and gas companies due to the industry’s complex operating environment and diverse stakeholder landscape. The industry can only thrive of the face of a good and active community engagement and stakeholder relationship management. Using doctrinal research methodology, this paper has examined the relevance of community engagement and stakeholder relationship. Finding shows that the importance of the effective community and stakeholder engagement management helps the oil and gas industry in mitigating operational risks, enhancing reputational capital, facilitating social license to operate, accessing capital and talent, and promoting sustainable development in host communities. It was also our finding that factors such as historical mistrust, cultural diversity, limited human and material resource, power imbalances, regulatory uncertainties, dynamic stakeholder expectations, and socio-political tensions, poses a huddle to effective community and stakeholder engagement management. It is therefore recommended that both the host communities and the stakeholders should prioritize community and stakeholder engagement management as a strategic imperative, integrating the outcome into corporate governance, risk management, and sustainability initiatives. This will entail adopting proactive engagement strategies, transparent communication practices, and mechanisms for addressing communities and stakeholders concerns effectively.