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Nigerian lands Shell post in west Africa

Financial Times: Nigerian lands Shell post in west Africa

“The company is struggling to come to grips with its role in the civil unrest that plagues many of the country’s oil producing regions.”

By Carola Hoyos, Energy Correspondent

Published: July 21 2004 5:00 | Last Updated: July 21 2004 5:00

Royal Dutch/Shell has appointed the first Nigerian to head its operations in the west African country.

Basil Omiyi will become managing director of Shell Petroleum Development Company of Nigeria, Shell’s biggest country operation, in September. He will take over from Chris Finlayson, who is to become head of exploration and production for Africa and retain the role of Nigeria country chairman.

Mr Omiyi takes over the post during the most troubled year in Shell’s recent history.

Nigeria accounted for 1.3bn barrels of the slightly more than 4bn barrels of oil and natural gas reserves Shell wrongly booked with the US Securities and Exchange Commission, which is now investigating the company, as are the US Department of Justice and UK and Dutch regulators.

Nigeria, which is Africa’s biggest oil producer, accounts for 13 per cent of Shell’s oil and 4 per cent of its natural gas production.

Although many of the country’s onshore fields are ageing, it remains an important part of Shell’s growth strategy, with an anticipated increase in volumes of liquefied natural gas and offshore oil production expected to help the company boost its faltering overall production growth.

But Nigeria remains one of Shell’s trickiest operations. The company is struggling to come to grips with its role in the civil unrest that plagues many of the country’s oil producing regions.

Last month, a report commissioned by Shell – which has presented itself as a champion of sustainable development – found that the company’s presence fuelled the cycle of violence that kills more than 1,000 people in Nigeria each year.

The report published by WAC Services, a consultancy specialising in west African issues, suggested Shell would have to pull out of onshore production by 2008 to stay true to its principles.

Shell, which has been active in Nigeria since the 1930s and producing much of its oil since the 1950s, rejected the conclusion.

Mr Omiyi said that the fact that he was Nigerian would be “a great asset in many ways. I am not saying it will do magic, but it will help”.

He said the initial reaction in Nigeria had been that “it is a very great move by Shell to fully associate with Nigeria and its people, and I think this will rub off on the stakeholder community”.

Within Shell, “it’s always been an issue: ‘Will we see a Nigerian at the top of Shell Nigeria?’ It is a vindication of what I have always believed”, Mr Omiyi said, adding that for those among his staff who had doubted the possibility, it was proof that Shell was an equal opportunity employer.

The 58-year-old petroleum engineer, who was born in the Edo state in the Niger Delta and studied at the University of Ibadan, arrived at Shell in 1970 and has worked in Nigeria, the UK and the Netherlands.

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