Third Party Logistics Outsourcing: An Exploratory Study of the Oil and Gas Industry in Nigeria

Abstract

Not much has been researched in logistics outsourcing in the emerging countries, particularly in the oil and gas industry. This article investigates the feasibility of logistics outsourcing by the international oil and gas companies in the emerging business environment of Nigeria. An exploratory, multicase, qualitative approach was applied, involving 40 interviewees in three international oil companies and three of their logistics service providers. Findings reveal that vendors’ capabilities, host community issues, joint venture influence, and employees’ reactions challenge international oil companies’ logistics outsourcing implementation while relationship management, contract management, and change management skills enable them handle these challenges. The results also show that surveyed organizations implement logistics outsourcing piecemeal and need to scale up their current capabilities to effectively integrate logistics outsourcing. The research confirms logistics outsourcing is achievable in Nigeria, but requires synergies and symbiosis between the oil companies and their local vendors.