Daily Mail (UK): Shareholders fume at Shell Nigeria crisis

Sam Fleming,
16 May 2007

Royal Dutch Shell was lashed by scathing shareholder criticism over its troubled Nigerian operations after suffering yet another hit to production.
 
Exploration chief Malcolm Brinded admitted at the firm’s annual general meeting to ‘immense challenges’ in the Niger Delta, where the security situation has deteriorated so dramatically that Shell can’t even quantify how much crude it is leaking into the wetland.

Widespread insurgent attacks forced Shell to shut in an average 477,000 barrels a day last year. Yesterday villagers occupied a major oil pipeline hub feeding the Bonny export terminal, hitting another 170,000 barrels a day of capacity.

Rebels are protesting over their failure to share in the vast wealth generated in the prolific oil-producing Delta. Some 54 Shell staff and contractors were taken hostage in 2006 alone.

Shell released a report into its Nigerian division which revealed a combination of attacks on pipelines and equipment failure led to a ‘significant increase’ in the amount of oil it is leaking into the environment.

The firm presided over 241 spills last year, up from 224 in 2005.

While 69% of the leaks were down to sabotage, Shell admitted to two major leaks resulting from human error and corrosion.

In a turbulent AGM, the firm was accused of ignoring the needs of local Nigerians and causing devastation through gas flaring and leaks. Shareholder Helena Paul urged Shell to make ‘reparations’ to impoverished local Nigerians.

Brinded admitted Shell ‘could have done a better job in engaging with local communities over the years’. The expectations placed on the firm in the Delta ‘are very high’ he said, adding: ‘Mostly these are matters for the government.’ But another investor warned Shell is facing ‘a growing antagonism from those who feel their lives and standards of living and environment are ignored’.

That message was echoed by Irish activist Willie Corduff, who accused Shell of riding ‘roughshod’ over inhabitants of rural County Mayo with its controversial Corrib gas terminal project.

Some 3.7% of shareholders voted against the directors’ pay report, amid concerns over rapidly rising pay and share option awards.

Shell ‘A’ shares rose a penny yesterday to 1,779p.

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