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The Business: Shell in fresh Nigerian oil production threat

By: Richard Orange

ROYAL DUTCH Shell, the energy giant, risks permanently losing some of its oil production in Nigeria amid growing anti-Western sentiment in the build-up to April’s presidential election.

The two leading presidential candidates, Major General Muhammadu Buhari and Umar Musa Yar’Adua, are considering nationalising oil fields in the Niger Delta should they come to power.

The Business has learnt that MD Yusuf, a powerful Nigerian political figure backing the Yar’Adua political campaign, has established links with the government of Hugo Chavez, the rabidly anti-Western Venezuelan president. Chavez has forcefully renegotiated the terms on which international oil companies operate in his country.

Jon Bearman, managing director of Clearwater Research Services, an oil industry specialist, said the Venezuelans were actively seeking to influence policy in Nigeria.

Bearman said: “MD Yusuf has the contacts with Chavez and has been introducing the Venezuelans to Yar’Adua. The Venezuelans are trying to talk to anyone who’ll listen to them, and people around Yar’Adua are very interested in this resource nationalism agenda.”

Yar’Adua is the anointed candidate of Nigerian president Olusegun Obasanjo, and his People’s Democratic Party, putting him in a strong position. He has pledged to continue with Obasanjo’s privatisation programme.

Advisers to the candidates, Bearman said, were considering whether bringing some of the fields in the most contested areas of the Niger Delta back under government control might be a way of bringing an end to violence in the region.

Shell’s operations in Nigeria have been seriously disrupted by violence in the Niger Delta. A fifth of Nigeria’s oil production capacity, or about 600,000 barrels per day, has been shut down for a year because of militant attacks.

14/02/2007

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