Transnational corporations = companies that are located in/produce and sell products in more than one
country
○ eg/ Sony → makes electronic products in China and Japan
● TNC factories are located in poorer countries , where labour is cheaper
○ Due to fewer environmental and labour regulations
○ TNCs can make more profit
● They can improve the development of countries they work in → transfer jobs, skills and money to LICs
○ Reducing the development gap
● TNC offices/headquarters are located in richer countries , where there are more people with administrative
skills
○ Due to better education
Role of TNCs in Nigeria’s oil industry:
● Oil industry is located in Niger Delta region
○ Vast area of wetlands
○ River flows into Gulf of Guinea
● Oil boom took off here in 1970s
● Depended on expertise/money of large TNCs based in Europe/Asia
○ Royal Dutch Shell (UK, Netherlands)
○ Chevron (USA)
○ Exxon-Mobil (USA)
○ Agip (Italy)
○ Total (France)
● Companies erected drilling platforms on oil and gas fields around Niger Delta region
○ Platforms are linked by pipelines to export terminals in the Gulf of Guinea
○ Gulf of Guinea → where crude oil is piped onto tankers
■ Oil is shipped to Europe/USA where it is refined into petrol/oil products
● The TNCs make most of their profit from refined oil
Environmental impact of oil in Nigeria:
● In order to keep control over oil industry → Nigerian government set up the NNPC to form joint ventures
with TNCs
○ NNPC = Nigerian National Petroleum Corporations
● Ensures that part of the profit from oil stays with Nigeria
● Oil industry causes environmental damage
○ Delta region contains important wetland and coastal ecosystems
○ Most people depend on natural environment for their livelihood
■ eg/ farming, fishing
● Damage caused by oil industry of Nigeria:
○ Oil spills from leaking pipelines → damage farmland and prevent growth of crops
○ Gas flares used to burn off gas from the oil → wasteful and harmful fumes released
■ Affect people’s health
■ Contribute to global warming
○ Oil heated by Sun → becomes highly flammable and burns out of control
○ Oil pollution → kills fish in the sea
⇒ Advantages and disadvantages of TNCs:
