The Russian government must oppose the development of a proposed oil and gas platform off Russia’s Sakhalin Island because the project has not been subject to appropriate environmental risk assessments, according to an international coalition of leading NGOs.
The coalition, which includes WWF, International Fund for Animal Welfare, Pacific Environment and Sakhalin Environment Watch, will submit a Statement of Concern to the Russian Inter-departmental Working Group on the Conservation of Western Gray Whales, a group of oil industry representatives and Russian government officials meeting Friday to discuss off-shore oil exploration near the feeding grounds of the critically endangered Western gray whale.
“The project may have a potentially devastating impact on the critically endangered Western gray whales,” the statement says. “Sakhalin Energy has a legal, social and ethical responsibility to ensure the project does not have unacceptable levels of damage to the marine environment, and the fragile species that live within it.”
The additional platform represents a dramatic expansion of the Sakhalin II project operated by Sakhalin Energy – a consortium of Shell, Gazprom, Mitsui and Mitsubishi – near Piltun Bay, the primary feeding area for Western gray whale mothers and calves. Recent estimates indicate that there could be fewer than 130 whales remaining, and scientific experts note that the death of just 1-2 females per year could lead to population extinction.
“The Russian Inter-departmental Working Group on the Conservation of Western Gray Whales has the future of the Western gray whale as its core responsibility, and must therefore act in the best interest of the whales, not in the interests of oil companies, and recommend that the platform not go ahead,” said Aleksey Knizhnikov of WWF-Russia.
Sakhalin Energy received the necessary approvals for the Sakhalin II project based on just two platforms, with its own analyses indicating that drilling technology advances eliminated the need for a third. The company acknowledged that having two rather than three platforms was preferable due to a “smaller footprint with consequent reduced environmental impact”. Moreover, a previous Sakhalin Energy report shows that the area being proposed for the third platform is unsuitable due to an unstable clay seabed in the earthquake-prone area.
The company plans to conduct a seismic survey this summer to determine the best location for the platform. The environmental groups say that seismic surveys, which involve shooting loud pulses of noise into the ocean floor, can generate an unacceptable level of risk to whales that depend on sound for communication, feeding and navigation. Three seismic surveys were conducted in or near whale feeding habitat last summer and are believed to have caused severe pressure on the animals. Moreover, the Sakhalin Energy seismic survey for 2011 is planned to be undertaken before the effects of previous surveys on the whales have been fully understood.
“It is possible that cumulative impacts of major oil and gas development operations in the whale’s feeding area off Sakhalin Island have had a significant effect on the whale population, and these impacts have yet to be adequately assessed by whale scientists,” said Doug Norlen, Policy Director at Pacific Environment. Other companies operating in the area include Exxon Neftegas Ltd., Rosneft and BP.
The environmental groups are requesting that activities on the third oil platform planned by Sakhalin Energy be dropped as developers have failed to comply with basic operational standards. The organizations highlight the lack of a dedicated environmental impact assessment for all activities associated with the platform as well as a comprehensive review of the collective impacts of current and planned projects in the area.
Patrick Ramage of the International Fund for Animal Welfare called on companies and financial institutions involved to heed the advice of the scientific body monitoring the Sakhalin project. “What’s the rush? The world’s leading experts say industrial development of this sensitive coastline should not proceed until its environmental impact is properly assessed,” Ramage says. “In the wake of the BP disaster and other unfolding environmental tragedies around the world, we hope and believe the companies and institutions involved will reject the sudden effort to fast track a third drilling platform at Sakhalin.”
The Western Gray Whale Advisory Panel, a group of world renowned experts established to provide independent advice regarding the management of risks to Western gray whales, recently emphasized that “a piecemeal approach to assessment of the impacts of oil and gas development on the Sakhalin shelf, in which each new activity or item of infrastructure is considered in isolation, does not constitute ‘good practice’ from an ecological point of view as it dismisses and ignores cumulative or synergistic effects.”
Editor’s notes:
• The Sakhalin Energy document stating that two rather than three platforms “significantly reduces the potential for environmental impact” is available here.
• The most recent report of the Western Gray Whale Advisory Panel (WGWAP) is available here.
WWF is one of the world’s largest and most respected independent conservation organizations, with over 5 million supporters and a global network active in over 100 countries. WWF’s mission is to stop the degradation of the earth’s natural environment and to build a future in which humans live in harmony with nature, by conserving the world’s biological diversity, ensuring that the use of renewable natural resources is sustainable, and promoting the reduction of pollution and wasteful consumption.
The oil industry is worried that new US corporate-transparency legislation will undermine the EITI and its strategy of good governance, Anthea Pitt reports from Paris
AS THE Extractive Industries Transparency Initiative (EITI) nears its 10th anniversary, the mechanism is unwittingly at the centre of a war of words over how best to ensure financial transparency in the resources sector. The dispute centres on new legislation in the US, which demands more transparency from companies than even the EITI requires – and oil companies don’t like it.
Shell chief executive Peter Voser and Yves-Louis Darricarrere, the head of Total’s exploration and production unit, both claim the legislation – the Dodd-Frank Wall Street Reform and Consumer Protection Act, which passed into law last year – could undermine, or even threaten, the EITI’s approach to transparency and good governance. Voser says Dodd-Frank was rushed. To the oil industry’s dismay, the EU may now enact its own version.
HOUSTON—U.S. regulators have granted approval for Royal Dutch Shell PLC to drill a new well in the deep-water Gulf of Mexico as part of the oil company’s recently approved exploration plan for the area.
This marks the first time since last year’s Deepwater Horizon rig explosion that the government has approved plans to drill new oil-and-gas resources. Previously, regulators had approved only wells that were being drilled at the time the administration’s moratorium went into effect.
The approved permit allows Shell to drill a well in Garden Banks Block 427 in water depth of 2,721 feet, approximately 137 miles off the Louisiana coastline, the Bureau of Ocean Energy Management, Regulation and Enforcement said Wednesday.
In order to receive the permit approval, Shell complied with safety standards implemented in the wake of the 2010 spill, including satisfying the requirement to demonstrate the capacity to contain a subsea blowout, the government said. Shell’s deep-water exploration plan was approved this month.
Shell will use the Marine Well Containment Co. containment system as its oil spill containment solution. The system was built by a nonprofit consortium of large oil companies led by Exxon Mobil Corp.
Many people fondly remember the advertising slogan…
“You can be Sure of Shell”
The legendary crooner, Bing Crosby, sung the praises of Shell in the 1950′s.
Our research indicates that the slogan
“YOU CAN BE SURE OF SHELL”…
was first used in Great Britain by Shell in 1937 (right) months after the forced resignation of Sir Henri Deterding, the man most responsible for the creation and global success of the Royal Dutch Shell Group.
Sir Henri in his latter years as the undisputed strong man ruler of Royal Dutch Shell, had become a fascist and an ardent Nazi, who provided massive financial support to his friend Adolf Hitler and the Nazi party. The relationship and the financial support for the Nazis generated negative publicity for Shell.
We assume that the “YOU CAN BE SURE OF SHELL” slogan was designed to rebuild confidence in the company and its products and was no doubt directed at consumers and potential investors.
Fortunately, we have a comprehensive explanation from a Shell Chairman, Mark Moody-Stuart. It is in the form of a letter from him published by The Guardian newspaper on 2nd December 1997.
As can be seen, basically the slogan was meant to get across the message that Shell now has principles that it will not sacrifice to profit. It supposedly respects human rights and is trustworthy because it follows an ethical framework.
His illuminating letter, partly the product of the Shell PR propaganda department, was in response to a truly extraordinary indictment of the oil giant, in a Guardian article:
Reference was made in the article to Shell’s double-dealings (secret negotiations) with Hitler and the Nazis, a relationship which continued long after the resignation of Sir Henri Deterding as Director-General of Royal Dutch Dutch.
Ironically, the Moody-Stuart letter was published at the time when Shell so-called “value creation teams”, were already engaged in activities leading to the falsification of Shell’s oil and gas reserves and one of the biggest investor frauds in history.
I assume that the regret for what was done “in a different historical or social context” was a reference to the historical fact thatShell conspired directly with Hitler, heavily financed the Nazi Party, was at times anti-Semitic and sold out its own Dutch Jewish employees to the Nazis.
At the time the slogan was introduced in 1937, Shell was already in bed with Hitler and the Nazi Party. Royal Dutch Shell Director General, Sir Henri Deterding, had a very close relationship with Hitler. There was a report in a gossip column that his wife, Lady Lydia, had an even closer relationship with Hitler.
Some of this happened in 1937, the year the “YOU CAN BE SURE OF SHELL” advertising campaign was launched.
Shell was stabbing Great Britain in the back, dealing with and funding the most evil regime in history, while treacherously pretending that Shell could be trusted by the British public.
It’s about time that Shell issued a full formal apology for its past corporate sins, which contributed to the horrific deaths of millions of people, instead of including an apology for unspecified misdeeds within a carefully contrived letter attempting to defend the indefensible.
No wonder Shell has ceased using the slogan.
Earlier this month, Royal Dutch Shell threatened legal proceedings against us in relation to these matters.
EMAIL FROM MICHIEL BRANDJES, 3 MARCH 2011
From: michiel.brandjes@shell.com
Date: 3 March 2011 09:02:21 GMT
To: john@shellnews.net
Subject: RE: A HISTORY OF ROYAL DUTCH SHELL
Dear Mr Donovan,
Thank you for your message. Except for this message the company does not wish to respond to you other than to convey that it strongly disagrees with your views and allegations, objects to your actions and reserves its legal rights, including with respect to copyrights.
On an exceptional basis we tested your views about history with the relevant historians. They convincingly refute with evidence what you claim in contradiction with A History of Royal Dutch Shell.
Best Regards,
Michiel Brandjes
Company Secretary and General Counsel Corporate
Royal Dutch Shell plc
Registered office: Shell Centre London SE1 7NA UK
Place of registration and number: England 4366849
Correspondence address: PO Box 162, 2501 AN The Hague,
The Netherlands
I pointed out in my response that Shell’s paid historians provided not a single example of any factual inaccuracy. Furthermore, as I correctly predicted, no legal action has been taken. This is most definitely not a subject that Shell wants aired in open court, as the evidence confirms our published conclusion that Shell is the most evil multinational corporation in existence.
And history repeats itself.
In recent days we have seen the latest reincarnation of a ruthless Shell leader, Peter Voser (who made thousands of Shell employees reapply for their own jobs), defend Shell’s dealings with the latest reincarnation of a ruthless dictator, Gaddafi.
ENDS
COMMENT ADDED ON 1 APRIL 2011 FROM IAIN PERCIVAL, RETIRED GLOBAL CHIEF PETROLEUM ENGINEER OF SHELL INTERNATIONAL (Iain retired from Shell in 2006 after 33 years of service.)
John – in your posting dated 31 March 2011 “You can be sure of Shell – the biggest confidence trick in history”, you wrote
when Shell so-called “value creation teams”, were already engaged in activities leading to the falsification of Shell’s oil and gas reserves and one of the biggest investor frauds in history.
I wish to correct any impression the team members were in any way conducting themselves in any other way than as competent, dedicated technical professionals conducing a root and branch examination of the huge volume of hydrocarbons in Shell’s resource portfolio categorized as “Scope for Recovery”. The aim of the exercise was to identify activities & projects which could (I emphasise the word could) lead to booking volumes of hydrocarbons as “Expectation” volumes, not proved, and only if there was a reasonable level of certainty the projects would go ahead. The outcome of the Value Creation initiative was a complete change in the way the company goes about generating hydrocarbon development concepts, designing and executing well programmes, defining and executing major engineering projects and optimizing the way facilities are operated and maintained. The current suite of E&P Global Processes, operating standards, learning & development programmes, best practice sharing / knowledge management owe their existence to the pioneering work conducted by the Shell technical professionals who worked in the Value Creation Teams.
The implication that the Value Creation work led to the falsification of hydrocarbon reserves and investor fraud is false. The work has led to value generation for investors in Shell resulting from increased efficiency in the use of capital and increased effectiveness of the technical staff in their daily work.
I remain immensely proud to have been associated with the value creation effort and the implementation of the subsequent changes to how we did our work.
Kind regards,
Iain Percival
COMMENT ENDS
REPLY BY JOHN DONOVAN
I have supplied below some information from independent sources on the issue raised by Iain Percival.
In 1998 Shell created five Value Creation Teams (‘VCTs”) to find radical new ways to improve Shell’s Exploration and Production business (“EP”) profitability and reputation and hence aid growth in the EP business. One VCT was tasked with creating the maximum value from Shell’s hydrocarbon reserves. A paper dated May 1998 entitled “Creating value through Entrepreneurial Management of Hydrocarbon Resource Values” made a number of recommendations including changing Shell’s reserves guidelines. On 16 September 1998 the revised guidelines were issued to Shell’s operating units. These revised guidelines resulted in an overstatement of Shell’s proved reserves of 940 million boe for the two years ended 31 December 1999.
Below is a link to the “REPORT OF DAVIS POLK & WARDELL TO THE SHELL GROUP AUDIT COMMITTEE: EXECUTIVE SUMMARY” dated 31 March 2004. Every page of the 202 page report is marked “HIGHLY CONFIDENTIAL”
I invite readers to download the report and run a search on “value creation team” and read the information on the related ten pages. I will provide a few extracts here, but recommend that the entire 10 pages are read so the information can be seen in context.
From page 32 (or Court numbering -- page 52 of 202)
The Value Creation Team prepared a report for EP BusCom that was widely distributed within EP entitled “Creating Value through Entrepreneurial Management of Hydrocarbon Resource Volumes.”
From pages 45 & 46 (UsingCourt numbering -- pages 66 and 67 of 202)
In 1998 and 1999, a diagram known as the “cascade model” developed by the Value Creation Team appeared in the Guidelines. The”cascade model” illustrated the “migration of volumes between resource categories during the development life cycle.” In the diagram, “undeveloped reserves” appeared before “final investment decision” or FID (although the diagram does not make clear whether these volumes include proved undeveloped reserves).
Beginning in 1993, the Guidelines also introduced the concept of “commercial viability” (or later,”commercial maturity”) as a counterpart to technical maturity. As explained in the 1996 Guidelines, commercial viability implied that the project would yield an expected positive net present value (NPV) based on “advised Group reference criteria for commerciality.” Such viability was adequate for the inclusion of “reserves,” even though a more robust demonstration of “economic viability” (i.e., positive NPV under a number of technical risk downside scenarios) was necessary to obtain investment approval. In other words, it appears that the Guidelines permitted the booking of reserves (whether proved or expectation) with respect to projects that would not survive the Group’s capital allocation process, again a result that appears to fall short of “reasonable certainty.”
C. Revisions to the Shell Guidelines -- “Volume Value Creation Team”
In each of 1997 and 1998, Shell’s RRR performance significantly exceeded 100%. During these years Shell’s proved reserves were significantly boosted, not by exploration and development activity, but rather by significant modification to Shell’s methodologies for booking proved developed reserves. This change was at least partly the result of a review that was conducted under the auspices of a “Hydrocarbon Resource Volume Value Creation Team” (the “Value Creation Team”) within EP that was, in turn, established as part of Shell’s Leadership and Performance “LEAP” Focused Results Delivery Project. Similar to the relaxation in standards for booking proved gas reserves in 1990, this initiative was driven by the perception that Shell’s approach to booking proved developed reserves was more conservative than its competitors’, and that Shell’s reserves were therefore not maximizing value.
Footnote of page 4 (or Court numbering page 83 of 202)
It should be noted that the main increases in proved reserves resulting from the Value Creation Team’s revised Guidelines in 1997/1998 (See Section II C, below) related to proved developed reserves. Such proved developed reserves did not make up a significant portion of the reserves recategorization announced on January 9, 2004.
The problems at Royal Dutch/Shell can be traced to the first half of the 1990′s, when executives and investors began to grow concerned that the group’s reserves were not keeping pace with production. Their concern led them in 1997 to instruct the leadership and performance group, known within the company as LEAP, to “create value through entrepreneurial management of hydrocarbon resource volumes,” according to one company document.
Tony Hayward faced a barrage of criticism when US politicians claimed that he stonewalled their questions last year
By David Usborne in New York Wednesday, 30 March 2011
Managers of BP could face manslaughter charges when prosecutors in the United States finally conclude their criminal investigation into the Deepwater Horizon explosion in the Gulf of Mexico last April that killed 11 rig workers and triggered the worst oil spill in US history.
The mere possibility that these and other charges may now be on the table at the US Justice Department, first reported last night by Bloomberg News, put new pressure on the shares of the energy giant.
The sources, who spoke on condition of anonymity, did not identify those managers at risk of individual charges. Involuntary manslaughter, if proven, could carry sentences of up to 10 years in prison. They also stressed that no decisions had been made and the criminal inquiry is still some way off being wrapped up.
Suggestions that prosecutors are also considering opening a perjury investigation implies that investigators are re-examining testimony given by BP executives, including that of former CEO, Tony Hayward, during congressional hearings. Some lawmakers suggested that Mr Hayward, who became a bogeyman in the US media and was replaced last summer by a US national, repeatedly stonewalled when faced with their questions. Any suggestion that he gave false testimony would be more serious, however.
After the spill, BP said it would take full responsibility and was ready to implement the environmental clean-up. Facing a barrage of criticism from the White House, the company also agreed to set up a $20bn fund to compensate Gulf Coast residents.
The US Justice Department said last June that it would open both civil and criminal investigations. BP is already budgeting for additional fines that the US government will levy on it when all the investigations are concluded. If the company is found guilty of gross negligence, which might be implied were manslaughter charges indeed to be filed, those fines could quadruple to as much as $21bn.
A decision to prosecute individuals within BP as well as the company itself would be an unusual step since it is normally the corporations themselves that are targeted. It would be seen as further evidence of the Obama administration’s determination to take the toughest line possible with the UK-based company and make an example of it in this case.
“They typically don’t prosecute employees of large corporations,” noted Jane Barrett, a law professor at the University of Maryland. “You’ve got to prosecute the individuals in order to maximise, and not lose, the deterrent effect.”
Shortly after the accident, the US Attorney General, Eric Holder, signalled he would encourage an aggressive approach. “We will closely examine the actions of those involved in the spill. If we find evidence of illegal behaviour, we will be extremely forceful in our response,” he said. Other US officials also said at the time that individuals could eventually be targeted for criminal charges.
Shell wants us to believe that in exploring for and extracting natural gas from underground layers of shale in the Karoo using the polluting and extremely water-intensive technique of hydraulic fracturing or fracking, they have all of our best interests as well as those of the environment at heart.
They must also think us the most gullible halfwits this side of the Niger Delta.
In a recent full-page newspaper ad, the multi-billion dollar oil giant’s Bonang Mohale writes passionately about his company’s “commitments to the Karoo”, promising not to despoil and pollute it in the way fracking has been documented to mess up formerly pristine landscapes and water sources elsewhere. He describes natural gas as a “more environmentally friendly” option and a “cleaner energy source” and twice refers to its role in building a “sustainable energy future”.
Pure greenwash! In 2008 the UK’s Advertising Standards Authority ruled Shell’s use of the word “sustainable” in an ad about its involvement in extracting oil from Canadian tar sands “misleading” and in violation of industry codes for “environmental claims”, “substantiation” and “truthfulness”. The same standards ought to apply here.
In complete contradiction to their PR-laced public utterances, Shell has an atrocious environmental and human rights record, as even a cursory glance into their skeleton-packed closet reveals:
• In County Mayo on Ireland’s west coast, a fishing and farming community has been fighting a protracted battle against Shell’s plans to build a pipeline and gas refinery that has involved violent clashes with police, hunger strikes, arrests, and masked men beating up local activists and sinking an outspoken opponent’s fishing boat.
• In 1995 Greenpeace activists stopped Shell from sinking the Brent Spar oil platform, laden with tonnes of toxic and radioactive waste, at sea.
• Shell has a long and sinister history of environmental destruction and human rights abuses in Nigeria. More than a thousand oil spill cases have been brought against the company in the Niger Delta, where it continues to illegally flare natural gas, a practice that causes more greenhouse gas emissions than all other sources in sub-Saharan Africa combined. Long implicated in bribing local officials and politicians, WikiLeaks cables reveal that Shell inserted employees into all main ministries of the Nigerian government and “knew everything that was being done in those ministries”. Shell is deeply implicated in the Nigerian government’s 1995 execution of Ken Saro-Wiwa and 8 fellow environmental and human rights activists and in 2009 agreed to pay their families $15.5m as a “humanitarian gesture”.
• Environmentalists have warned that Shells’ Sakhalin II oil and gas operations in Russia will contribute to pushing the critically endangered Western Pacific Grey Whale towards extinction.
• Shell has plans to drill for oil just 30 kilometres from Western Australia’s ecologically sensitive Ningaloo Reef and off the coast of the USA’s fragile Arctic National Wildlife Refuge in Alaska.
• Shell has contributed more than a million dollars towards defeating legislation to set goals for reducing greenhouse gas emissions in California.
• Shell is coming under increasing pressure from environmentalists, indigenous communities and its own shareholders over its extraction of oil from tar sands in Canada, which involves strip mining large swaths of forest and wetlands and uses and pollutes vast quantities of water while generating at least five times more carbon emissions than conventional sources of oil.
If Shell were a person, we’d have no hesitation in recognising this list as the shocking resume of a sociopathic career criminal whom we’d never let anywhere near our homes or children. We cannot afford to trust them with the Karoo.
Note to Shell: Even in the extremely unlikely event of you being able to convince us that you are capable of producing gas in the Karoo without wasting and polluting our water, we wouldn’t want you to. We don’t even want you to explore for it. We want you to leave the gas in the ground. The age of carbon-based fossil fuels – of coal, oil and natural gas – is coming to a close and until you propose to help us develop our abundant, clean, green and truly sustainable renewable energy sources, including solar and wind power, stay out of the Karoo.
Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.
LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSA.LN) Tuesday announced it has signed a sales and purchase agreement for its 270,000 barrel-per-day Stanlow refinery in the U.K. and certain associated local marketing businesses with Essar Oil Ltd. for $1.3 billion.
MAIN FACTS:
-The proposed sale covers oil products, chemicals manufacturing and access rights to certain distribution terminal assets, plus the commercial fuels bulk fuels and local marine fuels businesses associated with the refinery.
-It does not include any of Shell’s U.K. Retail sites, the Shell higher olefins plant and alcohols units, the lubricant oils blending plant, lubricants marketing business, Shell aviation operations at airports, non-local marine business, marine lubricants, commercial road transport marketing businesses, bitumen marketing business or the Shell technology center at Thornton.
-It is expected that the transaction will be completed during the second half of 2011.
-On completion of the sale, Shell will have reduced its global refining exposure through a combination of asset sales and closures by a total of 1.6 million barrels since 2002.
-In addition to the sale of the assets, the two companies will enter into an exclusive five year crude supply contract by Shell to Essar and into long-term agreements for the supply of products in the U.K. by Essar to Shell.
-Shares at 0920 GMT down 3 pence, or 0.1%, at 2235 pence valuing the company at GBP80.35 billion.
-By Peter Evans, Dow Jones Newswires; 44-20-7842-9308; peter.evans@dowjones.com
FYI Enron was populated by a host of former Shell USA managers who were let go by Shell in the early 1990′s as part of Shell USA’s reorganization and downsizing program (Shell USA had finally managed to manage the company into a serious financial problem with a host of bad decisions).
So, it comes as no surprise to anyone familiar with the two organizations that RD Shell had it own financial scandal a few years later. The reserves scandal at Shell was a long time in coming but the ‘problem’ was known about internally for many, many years. Shell USA knew it had a credibility issue with its reserve bookings in the mid-1980′s.
Senior level Shell management simply hid it for as long as they could. Nobody wanted to be the ‘Grinch that stole Christmas’, so the reserves fraud continued from one succession of senior management to another. Finally, the chickens came home to roost.
This issue does, of course, point to the fact that RD Shell has a serious ‘corporate culture’ problem, i.e., it is fundamentally corrupt. Management was and is not only lying to investors and securities regulators, they were and are lying to themselves. Maybe that is why RD Shell is no longer on the list of ‘most sustainable’ companies.
PORT HARCOURT, Nigeria — Posters show smiling students posing after receiving university scholarships. New roads appear on formerly potholed mud tracts. Millions of dollars are promised to improve the lives of the desperate poor.
These campaigns by oil company Royal Dutch Shell PLC and other foreign firms make it seem they are running for office in crude-rich Nigeria, which will hold crucial presidential, federal and local elections in the coming weeks. The multinational firms have spent hundred of millions of dollars toward projects they advertise as improving the life of those living in the country’s troubled Niger Delta.
But state-paid teachers are rarely hired for the newly built schools and hospitals lack the lifesaving drugs that government should provide. The oil companies may advertise their improvements, but alienated communities blame them for the long-term environmental damage the region has suffered over half a century of oil production. Meanwhile, the billions of dollars that oil produces for Africa’s most populous nation fuels an opaque government dominated by graft and corruption.
“Sometimes, you look at it as a no-win situation,” said Funkakpo Fufeyin, a government and community relations manager for Shell. “There will always be people … who will feel neglected and they go out and make these kinds of accusations. What better can you do to bring everybody together?”
Shell first discovered oil in Nigeria in 1956 and quickly became the dominant oil company in the country’s Niger Delta, a region of creeks and mangroves about the size of South Carolina. Its Nigerian subsidiary pumped oil after the country’s independence from Britain in 1960, during its Biafran civil war that saw more than 1 million people die and through its decades of military rule.
Nigeria now pumps out about 2.4 million barrels of oil a day, making it Africa’s top producer. The OPEC-member nation serves as a major supplier of crude oil to the gasoline-thirsty United States, meaning interruptions to supply can affect prices.
Oil money, after years of booms and busts, now provides about 80 percent of all government spending in Nigeria. But those billions rarely translate into services in a country considered by analysts to have one of the world’s most corrupt governments. Transparency International recently ranked the state-run Nigerian National Petroleum Corp., which partners with foreign firms to pump oil, as having one of the poorest accountability records in the world.
President Goodluck Jonathan has spent billions of dollars in the country’s reserves ahead of the election with little or no oversight.
Meanwhile, activists accuse oil firms of cozying up to military rulers and leaders who employed violence to keep the region pacified. A U.S. lawsuit accused Shell of playing a role in the 1995 executions of activist Ken Saro-Wiwa and other civilians by Nigeria’s former military regime. Shell reached a $15.5 million settlement to end the lawsuit in 2009, but acknowledged no wrongdoing.
Today, tripled-fenced compounds for foreign oil firms operating in the delta resemble quiet U.S. suburbs with manicured lawns and bicycle-riding police. Outside, children with polio crawl on their hands and knees across highway ramps begging for money. Military convoys roar down roads in trucks labeled “Vampire,” with masked soldiers arming mounted machine guns.
More than two-thirds of people living in the delta earn less than $75 a month.
“The needs are so vast in these communities for basic services and basic infrastructure, this kind of spending can make a difference, at least near the company’s operations,” said analyst Philippe de Pontet of the Eurasia Group. “That can essentially earn them a social license to operate.”
This kind of spending also comes in handy as the country considers passing a bill to overhaul the petroleum industry, which could cut into foreign firms’ profits.
It isn’t just Shell that has such programs. U.S.-based Chevron Corp. recently announced a $50 million, four-year project with USAID to promote economic development in the delta. French oil giant Total SA and ExxonMobil Corp. also have similar development efforts.
However, Shell has embarked on a campaign to showcase its good works ahead of Nigeria’s coming elections. It recently brought journalists along to see a Port Harcourt hospital it operates, where expectant mothers lined up for health screenings and to nurse newborn babies on clean-sheeted cots. A yearly membership to the hospital costs about $25.
While providing needed services in a country with a high infant mortality rate, many deep in the creeks of the delta would be hard pressed to travel there. Local clinics in the region, often faded cinderblock buildings, have no lifesaving antimalaria medication nor other drugs.
The company remains clearly hesitant to discuss the clear failings of the government in Nigeria. Shell spokesman Precious Okolobo repeatedly told a Dutch journalist that questions about government performance were “not valid for us to answer,” even after a presentation about the company building roads, providing electricity and commissioning schools — all matters for Nigeria’s leaders.
“The companies can do as much as they want to do, but you need the superstructure of the government,” Fufeyin said at one point. “If you build a school in a rural community, you have to bring the teachers.”
Yet government control disappears outside of the city, where militants and armed gangs operate. A low-level insurgency began here in 2006, though it recently calmed after a government-sponsored amnesty program. Some estimate as much as 550 million gallons of oil have spilled in the delta from failing pipes and attacks since production began — at a rate roughly comparable to one Exxon Valdez disaster per year.
Shell flew journalists in a helicopter over a cleared area in the delta where locals ran makeshift refineries turning stolen crude tapped from pipelines into diesel and kerosene. The company blamed nearly all of its oil spills in 2009 on sabotage from thieves and militants. Environmentalists and community activists routinely blame Shell for the spills, pointing at the company’s aging pipelines and poor cleanup efforts.
As the helicopter flew over the region, one could see the rainbow-sheen of spilled oil running across the water.
___
Photographer Sunday Alamba contributed to this report.
By Tom McGhie and Will Stewart
26 March 2011, 7:03pm
BP is under intense pressure to settle the dispute with the four oligarch shareholders in its Russian joint venture that threatens the company’s future, after it emerged that rival Shell was holding talks with Kremlin-owned oil giant Rosneft about Arctic exploration.
Rosneft’s powerful chairman and Russia’s Deputy Prime Minister, Igor Sechin, said the company preferred to do a deal with BP, but that whatever happened its policy of exploiting Arctic oil and gas reserves would go ahead.
A Rosneft source said: ‘If we do not get a deal with BP, the state holding will find a new partner. Within the past three months Rosneft has received offers to work together from several leading energy companies, including Shell.’
BP’s big rival said it had had a relationship with Rosneft since 2007 and was open to further opportunities. Shell has made no secret of the fact that it sees the Russian Arctic as one of the world’s major untapped gas and oil exploration areas.
Company sources said they were interested in Arctic co-operation, but not the closer financial ties BP is seeking. BP is planning a share swap with Rosneft.
News of Shell’s intervention comes as BP is reeling from an arbitration court ruling by a Swedish panel in London that upheld the objection by the oligarchs in TNK-BP to the £6.3bn tie-up with Rosneft.
The shareholders, collectively known as Alfa-Access-Renova (AAR), say BP’s proposed Rosneft deal violates an agreement between BP and TNK-BP. This, they claim, stipulates that BP should pursue all development opportunities in Russia through the joint venture rather than going it alone.
BP’s new chief executive, American Bob Dudley, is also under pressure to reach a deal with the fourbnaires – Mikhail Fridman, Len Blavatnik, Viktor Vekselberg and German Khan.
Most analysts believe that Dudley, who was run out of Moscow by the oligarchs in a TNK-BP feud in 2008, misjudged the strength of opposition when he tried to reach a deal with Rosneft, bypassing TNK-BP.
Dudley will be hoping the Kremlin will put pressure on the oligarchs, but it is almost certain he will have to give them some form of compensation.
Illustration of 94 year old Alfred Donovan, founder of royaldutchshellplc.com, displayed courtesy of The Wall Street Journal. DISCLAIMER: This is not a Shell website nor is it endorsed by or affiliated with Shell. It is recommended internally by Shell far above what our own group internal comms puts out.
an observer of Shell: It appears that Voser finally got fed up with Mr Overpromise/Underdelivery. Despite all the nice words about him, he is clearly kicked out. Plenty of sycophants around him are now fearing for their jobs and positioning themselves whom to kow-tow now.
This bearded fellow wasted his great brain on very small details and he was unable to delegate. I think his only real good project was the SLIM project. This was many moons ago and launched him to the top jobs. And there he failed as frequently and eloquently pointed out on the Donovan site.
Big brain, a micromanager on par with the pointy haired boss in Dilbert, a vicious and vindictive attitude to those that were of no use to him or that might talk back.
In summary: Good riddance and now the legal system of Scotland can go after him. But I doubt they will.
Golden Triangle Watchman: What goes around comes around.... The announcement of Brinded has long been anticipated. We now wait for the next much smaller announcement.... Tom Purves to retire..... This will make our day when that moment happens.
Shell never deals with the issue of bad leadership until it is too late and the havoc has been wreaked.... However, as we say in the US, Every dog has its day..... and today that was Malcolm.
LondonLad: So early retirement then after all that ....... REPLY BY JOHN D. You are still playing a point scoring game. You seem to forget that the avoidable deaths of Shell offshore workers on Brent Bravo is at the heart of this matter. The deaths occurred after a safety audit led by Bill Campbell exposed a shambolic, illegal and shameful safety regime on Brent Bravo. They occurred after Shell senior Expro management had promised Bill that Shell would bring an end to the "Touch F*** All" culture and the falsification of safety records. The explosion and record breaking fine provide proof that the promises were not kept. There is NO commercial aspect to this matter as far as Mr Campbell is concerned. He is driven solely by a fear of an even worse event due to the same policy by Shell of putting production and profits before the safety of offshore workers. Please give Bill some credit for his integrity and for his long campaign, which has rightly received cross-party support from many MP's.
LondonLad: Agent provocateur indeed!! Never been called that before, and I am most certainly not in league with Shell in any way! I again reiterate my point : was Campbell fired or given early retirement from Shell and thereby lies his grudge or did he reach full retirement age in the company? An honest answer might convince many that his continuous aggressiveness against Shell is genuine or just an ongoing grudge. This is not a "slanging match" merely a point of clarification.
REPLY BY JOHN DONOVAN:
Mr Campbell has made it clear that he does not wish to get into discussion with someone making insulting comments while hiding behind an alias. With regards to his comment that you may be an agent provocateur, perhaps he gained that impression from checking your history of postings. Just so there is no misunderstanding, we welcome contributors who provide a counter-balance to negative postings about Shell. I have provided some links to further information about the Brent Bravo scandal. Despite all of the promises by Shell senior management about safety, which including appointing a safety Czar, its track record remains atrocious. Years after the Brent Bravo debacle, it was revealed that the lifeboats for a Shell North Sea platform were not seaworthy. You could not make it up.
“Lifeboats trouble at Brent field” published on 14 March 2008, UpstreamOnline revealed “SHELL’s safety record on its Brent Bravo platform in the UK Northern North Sea is once again under scrutiny after the discovery of technical problems with two lifeboats on the installation that resulted in both of them being removed from service.” Jake Molloy, general secretary of the Offshore Industry Liaison Committee was quoted in the article by Christopher Hopson as claiming “If they had loaded up this particular lifeboat, the chances are it could have been launched into the sea in an uncontrolled fashion which would have caused death or injury as it was held in place by corrosion and not by the designed system”. The article said that problems had been found with a second lifeboat on the Brent Bravo platform. It also reported that a lifeboat had launched itself into the sea from Shell’s Tern platform because the brakes and clutches were “dysfunctional” and had damaged the launch mechanism off the platform. Shell confirmed problems had been discovered with two lifeboats on Brent Bravo during “routine maintenance”. Shell was quoted as stating that it viewed the matter seriously and had “mobilised an investigation team on the platform”.
BILL CAMPBELL EMAIL SENT TO MEMBERS OF THE UK HOUSES OF PARLIAMENT
ROYAL DUTCH SHELL SAFETY CONCERNS
Outsider: LondonLad: In many cases "Reaching Retirement age" in Shell simply means being unable to find a position outside Shell -nowadays the most competent people generally move on long before reaching retirement age and pursue a second career elsewhere.
LondonLad: To : an observer of Shell, you state "It is commonly known that a great many employees of Shell Expro are freemasons". Where did you get this "fact" from - smoking whacky backy?? I doubt very much that a great many are indeed freemasons. Even if they are (wich I seriously doubt), so what? Let's face it they are a society that provide one of the largest contributions to charities in the UK. I think you very clearly have an axe to grind against Shell. In that context why does Campbell have such a chip on his shoulder over Shell? Was he sacked for some reason? Did he actually reach his retirement age in Shell? Would be nice to know so that we can believe more that his rants are genuine problems he has with Shell rather than caused by some hidden grudge.
Old Spirit: GTW, I know you are right, TP and others will get their due. What is painful is that those whose lives have been changed and whose spirits have been destroyed because of his actions, will not be compensated. Tom is not the only one taking credit for this new cruel process of forced ranking, by claiming credit for what market demand has meant for profits. There are promotions taking place right now because credit is claimed by those executing Tom's plan for performance 'refirings'. I worked in manufacturing sites where management and performance was a joke, and profits were above forecast. It's always been market demand and the hard work of the folks on the ground that make manufacturing successful, Tom is not a pioneer in taking undue credit for local successes, but he has certainly been the cruelest!
an observer of Shell: I have no proof nor will I ever find that proof, but this reprehensible conduct of the legal authorities smells to high heaven of masonic lodges. It is commonly known that a great many employees of Shell Expro are freemasons. The police forces all over the world are well presented in the various lodges. I would not be surprised if Brinded himself is a member.
Bill Campbell is a very courageous man taking on these evil forces. We in Shell all knew him to be a completely honest and competent Maintenance manager and HSE auditor. But he loses against all the parasites and sycophants whose sole job is to protect the directors. And then live well on the spoils of their abhorrent activities.
Top marks for the Donovans who keep this festering sore in the spotlight. To some it maybe a lot of repeating old stories, but those that want to hide and bury their bad actions know that time is on their side. And Shell has deep pockets and knows how to procrastinate.
GoldenTriangle Watchman: John, there is no issue with my post. This is the same GTW that has been providing updates for some time on the ill fated project CEP and the ill fated Tom Purves, both of which should be going fading into the background this year as old worn out news.
Goldentriangle Watchman: I retract my previous statement. COMMENT BY JOHN DONOVAN: WE HAVE REASON TO SUSPECT THAT THIS POSTING IS NOT IN FACT FROM THE PARTY WHO USES THE ALIAS "GOLDENTRIANGLE WATCHMAN ON THIS BLOG, BUT IS FROM AN IMPOSTER.
Posted on 31 March 2011
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