Houston Chronicle: Shell cutbacks to cost Nigeria jobs
March 23, 2004, 12:02AM
Copyright 2004 Houston Chronicle News Services
LAGOS, Nigeria — Oil giant Royal Dutch/Shell Group said Monday it plans to streamline its operations in this West African nation, cutting jobs even as its tries to boost oil production by half a million barrels a day.
Rival ethnic groups in the Niger Delta, where the bulk of Shell's oil is drilled, responded by threatening to force Shell to close oil production facilities if any of their people lose jobs.
Since last year, the militants have forced the closure of sites producing thousands of barrels of crude oil daily.
The disclosure of streamlining plans in Nigeria comes as Shell tries to contain the fallout from its recent reductions in its estimates of proven reserves of oil and natural gas worldwide.
Shell reduced its estimate of reserves in Nigeria by 1.3 billion barrels in January as part of a larger reclassification of 3.9 billion barrels in its reserves. The company announced an additional cut in reserves Thursday.
The January reductions caused an uproar that led to the resignations of Chairman Philip Watts and the company's head of exploration and production.
The company has also postponed the release of its annual report to give independent auditors time to review the company's reserves. Shell also faces a U.S. Securities and Exchange Commission investigation into its accounting for its reserves.
Reserves constitute an energy company's most valuable asset. Any reclassification of reserves into less certain categories is a major concern for investors.
Also Monday, Shell said auditors KPMG International and PricewaterhouseCoopers will review its study of oil and gas reserves and it will present 2003 accounts for approval in May.