Business Day Online (Nigeria): Fresh facts emerge on controversies over Shell MD

OLUSOLA BELLO & EJIOFOR ALIKE on 31 October, 2007

Why is Royal Dutch Shell planning to drop Basil Omiyi as the managing director of Shell Petroleum Development Company (SPDC)?

Contrary to speculations over age and length of service as reasons for his imminent removal, Omiyi may be removed to pave way for his deputy, Dale Rollins, an expatriate, to emerge as the managing director.

The move is propelled by government’s bid to review the joint-venture agreement, and there may be no stopping Shell’s parent company in The Hague, Netherlands from installing an expatriate.

A company source says putting Rollins on the seat is to ensure that the interest of the foreign company is protected as it is envisaged that a Nigerian managing director may place national interest above corporate interest.

“A Nigerian at the helm of affairs may compromise on certain issues that may affect the interest of the company. The parent company would want somebody that will represent its interest by the time the joint-venture agreement is being reviewed,” the source said.

Shell officials, who volunteered information on the issue on condition of anonymity, said Omiyi had never wielded powers as the managing director of the company.

According to them, the actual executive powers reside with the deputy managing director.

The expatriate, they say, may have been directed to take over the duties of the managing director, while Omiyi will remain the country chair of Shell companies in Nigeria.

A top official said the company directors in charge of production, exploration and facilities were responsible to the deputy managing director, while Omiyi spent most of his official time in Abuja, or elsewhere, attending to other official duties.

The SPDC in July 2004 became the first western oil major to appoint Nigerians to top executive posts for its operations.

This followed increasing pressure from government on international oil companies operating in the country to appoint Nigerians to responsible positions, particularly in the wake of the restructuring by foreign oil majors.

Omiyi was appointed managing director of Shell Nigeria on July 20 2004, while the deputy managing director, Joshua Udofia, was made senior adviser-Nigeria on September 1 2004. He replaced Egbert Imomoh as senior advisor and was based in Shell’s London headquarters.

Before his appointment as the deputy managing director, Udofia was the manager, western operations of SPDC after which he moved to the eastern operations as manager.

He also held managerial positions in other subsidiaries of Shell, both in the country and abroad.

Omiyi replaced Chris Finlayson, who became the chief executive of Shell exploration and production (E&P) in Africa.

Finlayson had succeeded Ron van der Berg mid-2003 as the managing director of SPDC before he was placed in charge of Shell’s African E&P operations, including Nigeria as well, in 2004.

Chima Ibeneche, another Nigerian, took charge of Shell Nigeria Exploration and Production Company (SNEPCO), a Shell unit in charge of deep-water exploration and production.

Omiyi’s previous position was Shell production director, before then he was director for external affairs. A graduate of chemistry from the University of Ibadan, Omiyi joined Shell in 1970 and had worked as a production engineer, divisional chief production engineer and operations manager. He had also been on cross posting twice to Shell UK, EXPRO and SIPM in The Hague.

Also in 2004, Ademola Adeyemi-Bero was made deputy managing director, taking over from Joshua Udofia when the latter moved to the company’s office in London.

Adeyemi-Bero was the southern swamp manager until 2003 when he was sent on cross posting to Shell Netherlands as director in the E&P division in The Hague.

Shell is the biggest operator, talking of the joint-venture agreements. It accounts for almost half of the country’s oil production capacity. Shell is also the biggest gas supplier to industries and the power sector. The Shell Group comprises Shell Petroleum Development Company (SPDC), holding 30 percent and acting as operator; NNPC has 55 percent (reduced from 60 percent when the cash-starved state company was compelled to cede 5 percent as it could not pay its full share in funding the group’s development plan); Total has 10-percent (raised from 5 percent out of NNPC’s 60 percent), and Agip holds 5 percent.

Total and Agip are among the main oil operators in the country that are partners in the Shell-led LNG venture, the biggest project in this country

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