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THE WALL STREET JOURNAL: Nigerian Leader, Shell CEO to Talk On Output Issues

January 24, 2008

DAVOS, Switzerland — Royal Dutch Shell PLC’s chief executive, Jeroen van der Veer, plans to meet with Nigerian President Umaru Yar’Adua on Friday in an effort to resolve security and funding issues that have hampered the company’s output in the country, one of its largest production centers.

In an interview, Mr. van der Veer said he hopes Shell can regain its share of lost oil output but that “conditions must improve for us to restart production and we’re not there yet.”

Nigeria, Africa’s largest oil producer, has a quota of 2.5 million barrels a day assigned by the Organization of Petroleum Exporting Countries. But oil-industry officials say actual output has been cut by about 20% by the action of militants in the Niger Delta.

Shell is Nigeria’s biggest foreign energy producer, with the country accounting for about 15% of its total world-wide production of 1.9 million barrels a day. But the company has been hurt over the past two years by militant attacks on its facilities. According to Dow Jones Newswires estimates, some 455,000 barrels a day of Shell-operated oil production through its joint venture with the Nigerian government remains shut in.

Mr. van der Veer said, “We have lots to talk about. It’s not only about security, it’s also about funding. The lack of funding for some projects has caused issues with meeting targets.”

Speaking separately to reporters, President Yar’Adua said he will ask the Shell CEO to invest more in his country’s domestic gas-supply, fertilizer and petrochemical sectors.

As part of larger changes under way in the energy sector, the Yar’Adua government has said it wants to inject more predictability into financing energy projects by enlisting well-capitalized Nigerian banks, which have been adopting Western accounting practices.

–Natalie Obiko Pearson in London contributed to this article.

Write to Spencer Swartz at [email protected] and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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