Sep 16, 2008

Ogoni: Shell and the Development of Nigeria

Active ImageFormer Special Advisor to Nigerian President discusses Shell’s legacy in Nigeria.
Below is an article published by Vanguard :
I have read The Guardian interview with the Managing Director of Shell, Nigeria [1 September 2008] with dread and misgivings.
It would be disingenuous of me to suggest that the interview was a public relations exercise. It was certainly not, given what I know of The Guardian.
But no Managing Director could smell sweeter than Mr. Sunmonu, judging from that interview. Shell is unable to produce more oil owing to poor funding from the JV operations and insecurity; he is unable to tell us how much lower these issues have affected production because production is “dynamic.”
Yet, production in 2007 averaged 700,000 bpd; Shell has the capacity to produce with the right conditions more than a million barrels a day.
It is a global company where over 270 Nigerian Shell employees work worldwide. It is restructuring and that takes time to settle down.
On development and corporate responsibility in the Niger Delta, Mr. Sunmonu bluntly stated that it was not the duties of energy companies operating in Nigeria to develop the Niger Delta, or indeed, to develop Nigeria, Shell can only generate revenue, employ staff, and give jobs to sub-contractors.
Despite the above, they contributed US$110m in 2007 to NDDC, US$1 70m to the Education Fund (a fund to which statutorily all Nigerian employees pay), in 5 years Shell has directly contributed US$200m to support community development — human capital, healthcare, infrastructure; altogether US$500m has been given to NDDC in 5 years.
Mr. Sunmonu then went into what a prudent CEO should have avoided; that the Governments of the Niger Delta in 2007 received US$4 billion etc, etc. It goes, without saying, what have these Governments done with this money?
An interview is as good as the interviewer — the kind of preparation needed before the interview. In the BBC series, HardTalk, the interview was incisive, sharp and blunt because the questioner is on top of his facts. If you are not, a good Chief Executive turns your interview into a PR exercise for his company.
Now, what is Shell’s legacy in Nigeria? Shell first explored for oil in Oloibiri — and that stands indictment of what oil companies do when they “finish” with an area. The people can grow no food, catch no fish — cannot live in the toxic waste that Oloibiri is today. Shall we look at Ogoni and Shell?
Directly or indirectly, Shell contributed to the decapitation of the leadership of those people.
When Shell expatriate staff are in Nigeria, we provide them with accommodation, security etc. Are these conditions replicated when our 270 Nigerians work worldwide in Shell? When Shell talks about restructuring, does it take a nuclear science for a reporter to understand that they mean sacking Nigerians?
Now, let’s go to the figures Shell has spent on development and related issues. Altogether, in 5 years, it is below US$1 billion. Why have we not seen any of these developments? But more importantly, last year, Shell declared a 6-month profit of US$17billion!!! BP’s profit was US$13bilion; Chevron declared US$17billion.
The reporter should find out how much of this is due to the Nigerian operations. He should equally find out how cost effective Shell’s operational license in the JV has been. Are there any persons who are able to do this in Nigeria?
Finally, I beg to disagree with Shell about the energy companies’ inability to develop the area of their operations. BP developed its area of operation in the far more hostile environment in Alaska and Siberia.
Shell has done the same in other areas, why not in the Niger Delta? It is too convenient to say that it is Government that has to develop the area — did Shell and other oil companies not develop Aberdeen, Corpus Christi, Dallas, Mobil, Nizhevarstovsk (Siberia), etc?