The Scotsman: Shell Pledges Future to Conflict-Torn Nigeria
By David Winning, City Staff, PA News
Posted 11 Jun 2004
Oil giant Shell stressed its commitment to Nigeria today after a report said ethnic violence could force it to withdraw by 2009.
The group said it was ready to overhaul its operating practices in Nigeria, which accounts for 10% of its total production and where 5,000 people have been killed in the past four years.
Experts commissioned by Shell outlined a number of failings by the company in the strife-torn country in an internal report delivered to executives last year.
They criticised the company for sometimes feeding the conflict by the way it awards contracts, gains access to land and deals with local representatives.
The three-strong group of experts also said the Shell security team was ill-equipped and outlined the effect of the violence on the group’s community development programme.
Shell today published these findings in a report on its economic, environmental and social performance in 2003. It comes as the group strives to restore investor confidence in the wake of its reserves scandal this year.
Emmanuel Etomi, sustainable community development manager for Shell Petroleum Development Company of Nigeria (SPDC), accepted the oil industry was “inadvertently contributing” to the conflict in the country.
Ethnic violence has spiralled over the past four years in Nigeria, which is home to approximately 130 million people with more or less equal numbers of Christians and Muslims.
According to Amnesty International, clashes between the two religious groups have claimed at least 5,000 lives since 2000. More than 1,000 people died in an outbreak of violence clashes between Christians and Muslims in Jos, Plateau State, in 2001.
Mr Etomi said Shell was ready to support efforts to end the conflict, but the Nigerian government and local authorities must take the lead.
The company was willing to change its operating, security and community development practices through a new strategy to be drawn up this year, he said.
More than 84.5 million US dollars (£46.4m) was given by Shell last year to development programmes in the region, including the Niger Delta Development Commission.
Shell is in the process of rebuilding its reputation after announcing in January that its accessible stocks were 20% lower than previously thought.
The unfolding crisis claimed the scalps of three senior executives, including chairman Sir Philip Watts and the head of exploration and production Walter van de Vijver.
Both men were criticised in a report in April that revealed they had known since 2001 that reserves had been overbooked.
Shell revised estimates for a fourth time last month when it said its accessible stocks were 4.47 billion barrels lower than previously thought at the start of 2004.
The circumstances surrounding the downgrades are currently being investigated by regulators on both sides of the Atlantic.