The activities of Multinational Oil Companies in their host countries have receive increasing scholarly and international attention in recent years. These companies have long suffered from public criticisms especially in developing countries and this gives them a rather unpleasant public image. The oil and gas sector is among the leading industries in championing corporate social responsibility. In recent years, oil companies attach greater importance to their social and environmental impact than they used to (Frynas, 2005).

This research is meant to describe and analyze the level of commitment and effectiveness of corporate social responsibility by Statoil and shell in Nigeria, as many findings have proven that there is mounting evidence of a gap between the stated intentions of these companies and their actual practices, and impact on the local population. Background The oil and gas industry is the backbone of the Nigerian economy, and a major factor in its world standing. With a projected population of 155 million in 2009 (UNFPA. rg), Nigeria is by far the most populous nation in Africa. The third largest economy in Africa, and Africa’s largest producer of oil. As in the case of many others “petro states”, the windfall income from oil in Nigeria has proved in many ways to be a blessing and curse at the same time. With a gross national product of USD 260 per year, Nigeria is one of the poorest countries in the world. An estimated 70% of Nigerians live far below the poverty line on less than 1 US dollar per day, and without access to electricity, clean water or air (Alston, 2006).

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Consistent struggle by elites to gain access to profits of the oil boom resulted to successive military governments for over three decades after independence. Despite the country’s major problems of corruption, inter-tribal or inter ethnic conflicts, border disputes, political instability and civil unrest, multinational oil companies have always seen Nigeria as an attractive area for upstream investment, and Statoil and Shell are not exceptions. Multinational companies play a key role in Nation Building, they account for a large proportion of the state’s revenue through; the transfer of foreign direct investments, skill