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Business Day Online: N/Delta crisis: Shell Nigeria increases expatriate pay by 30%

04 January, 2008 01:00:00 EJIOFOR ALIKE

As Royal Dutch Shell embarks on a worldwide restructuring to cut jobs and costs, Shell Nigeria has increased the salaries of its expatriate staff by 30 percent.

Nigeria is the group’s largest oil and gas operational area outside the United States and the European North Sea.

Indeed, the company is set to start full restructuring on April 1.

Investigation has revealed that the increase in expatriates’ benefits, which is part of the restructuring exercise, is aimed at attracting the best foreign manpower and balancing the company’s expatriation system.

A Shell source, who spoke on condition of anonymity, said the measure was not peculiar to the country.

According to him, the group has also increased allowances of expatriate staff posted to the Middle East and other parts of the world where the operating environment is increasingly becoming volatile.

He said attacks on oil and gas installations were not restricted to the country.

As the Niger Delta militants kidnap oil workers and destroy oil facilities, Al-Qaeda has also declared war on Middle East oil facilities to cut oil supply to the United States.

It would be recalled that a recent report by the United States Energy Information Administration (EIA) showed that terrorists had in a recent attack rammed three bomb-loaded cars through the front gates of Abqaiq, a gigantic Saudi Arabian oil facility.

The report, which noted that the terrorists got as close as 300 feet of the most sensitive areas, also predicted that a successful strike would have lifted oil prices to $150 a barrel for as long as a year.

The Shell source said the crisis in the Niger Delta (where expatriates are targeted for kidnap for ransom) had made it imperative for the company to reward expatriate staff working in the country.

He gave assurance that the move was not to give undue favour to foreign oil workers, but to encourage them to work in the country.

“It is just to ensure that they don’t reject posting to the country. Again, when this kidnapping thing started, many expatriate staff sought for what we call ‘cross-posting’.

“This new package is just to discourage those things. Do not forget that in Shell many Nigerians are employed as expatriates. Many of them went to school abroad and have dual citizenship. They enjoy all the benefits attached to expatriate positions,” he said.

As the parent company is making plans to reduce costs by $500-million a year, Shell Nigeria plans to cut cost by $100-million in the next few years.

The measure involves staff reshuffling and job cuts. No major management reshuffle has been carried out since 2004 when a reserve scandal surfaced.

Militant activities have cut oil exports by a fifth and chased away new investments from Africa’s biggest oil and gas reserves. There was a lull of about four months after the inauguration of President Umar Yar’Adua in May, when the new goverment began tentative peace talks. But millitants pulled out and resumed attacks after the arrest of of one of their leaders in September.

Several armed groups in the delta demand local control over oil revenues, an end to what they see as neglect of their impoverished communities, compensation from oil companies for pollution, and greater political autonomy. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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