This study examined the effect of environmental remediation and sustainability investments on the operational performance of Oil and Gas Firms in Nigeria. Specifically, the study assessed the effect of environmental remediation costs, environmental investment costs, and community development and corporate social responsibility (CSR) costs on the production volume (output) of selected firms. The study adopted an ex-post facto research design and utilized secondary data obtained from the annual reports and accounts of five sampled oil and gas firms: Conoil, Mobil, Japaul Oil, MRS Oil, and Total Nigeria Plc, covering the period from 2010 to 2024. Panel data analysis was conducted using Panel Least Squares (PLS) regression under a fixed effects model. The empirical results revealed that environmental remediation costs (ERC) have a positive and statistically significant effect on production volume, with a t-statistic of 8.8321 and a p-value of 0.0000, indicating that increased spending on environmental clean-up and restoration enhances production efficiency. In contrast, environmental investment costs (EIC) exhibited a negative but statistically significant effect on production output, with a t-statistic of -6.6960 and a p-value of 0.0000, suggesting that such investments may impose short-term operational constraints despite their long-term benefits. Furthermore, community development and CSR costs (CDCSR) showed a negative and statistically insignificant effect on production volume, with a t-statistic of -0.9647 and a p-value of 0.3382, implying that these expenditures do not have a direct measurable impact on production within the study period. The model demonstrated a strong explanatory power, with an R-squared value of 0.8962, indicating that approximately 89.62% of the variation in production output is explained by the included environmental cost variables. The findings suggest that while environmental remediation activities significantly enhance operational performance, other environmental expenditures require strategic management to optimize their impact. The study concludes that oil and gas firms in Nigeria should prioritize environmental remediation efforts while adopting a strategic and phased approach to environmental investments and CSR activities. This will ensure a balance between environmental sustainability and operational efficiency, thereby improving overall firm performance.
Ph.D. et al. (Wed,) studied this question.