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MarketWatch: Shell cautiously optimistic on return to Nigeria’s Ogoniland

By Benoit Faucon
Last Update: 7:34 PM ET May 8, 2007

LONDON (MarketWatch) — Royal Dutch Shell PLC is “cautiously optimistic” over its return to Ogoniland, Nigeria, after local leaders expressed openness on the matter, Shell Nigeria’s chairman said in its annual sustainability report.

The Anglo-Dutch oil major stopped operating in Ogoniland in 1993 after the company was hit by a wave of protests from locals over its operations in the Niger Delta area.

“Overall, I am cautiously optimistic…Government and the traditional rulers both tell us they want us to come back,” Shell Nigeria’s chairman Basil Omiyi said in the report, published Tuesday on its Web site.

“In my meetings with Ogoni leaders they have talked about putting the past behind us and sitting around the table to talk. It will take patience and understanding, but I think we will get there,” he added.

The Movement for the Survival of the Ogoni People that campaigns against Shell and contributed to its departure, couldn’t be reached for comment.

In 2005, Shell said it would start reconciliation talks with the Nigerian state and representatives from Ogoniland that could lead to its return to Nigeria’s oil-rich region.

The government confirmed in October 2006 Shell could keep its oil license in Ogoniland for at least another year to give the company time to resolve its problems with the Ogonis.

Regarding unrest in the parts of the Delta where it operates, Shell Chief Executive Jeroen van der Veer said in the report that “no, we aren’t thinking about leaving.”

Omiyi said the unrest was largely due to poverty, “the way the Delta is represented in national politics” and “the rise of organized crime, fueled by large-scale thefts of crude oil”.

“The four Delta states where we operate now typically get more than $3.5 billion a year from the federal government. However, the money is not being properly used, because of corruption and a lack of local capacity to invest it,” Omiyi said.

“Think of these as overlapping circles – the bigger the overlap, the bigger the crisis. The approach of the presidential election has made the current crisis so big,” he said.

Shell said Last week that as a result of the unrest, 178,000 barrels a day of production remained shut down on a net basis at its Shell Petroleum Development Company joint-venture.

In the sustainability report, Shell said 96 cases of bribery and fraud were reported in 2006 for the company worldwide, leading to the departure of 143 staff and contractors.

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