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Shell and PIB: blackmail is the game

As the oil industry across the globe focused on the Gulf of Mexico and the remediation efforts mounted to contain the massive spill caused by the explosion of BP’s oil rig on April 20, Shell, Nigeria’s Anglo-Dutch oil operator, was back on the campaign trail to get the federal government either to water down or back off from going ahead with the Petroleum Industry Bill (PIB) currently before the National Assembly.

To demonstrate its crass insensitivity, it “dangled” a $40 billion investment carrot which its Nigerian Managing Director Mutiu Sunmonu claims stands imperilled in the event of the PIB sailing through.

That is vintage Shell – the typical pig-headedness of an international oil operator which insists on crafting municipal legislations meant to regulate its activities, in its own image and after its likeness.

One recalls that Shell’s former Regional Executive Vice President, Ann Pickard had, in a moment of mindless arrogance described the PIB as “a cumbersome document that lacks insight into the very basics of our industry”,?whose fiscal provisions are “harshest in the world”.

What the redoubtable Shell hierarch meant to say was his company would rather have a draft legislation prepared at the company’s corporate headquarters in the Netherlands!

I guess it is pointless to dwell on the continuing objections by Shell and its cohorts to the PIB which merely serves to deflect scrutiny from their activities that have turned the vast lands of the Niger Delta into massive, inhospitable wastelands.

Those sufficiently versed in oil industry operations, including no less a personality as Pedro Van Meurs, a Dutch from the home country of Shell whose industry experience is said to span over 40 years, have been quick to dismiss the charge that the proposed law that will scuttle future investment in the industry.

Meurs is on record to have stated that “there is no truth in the allegation that PIB fiscal system is the harshest in the world or that it will halt investment”.

His observation on the bill is instructive: “this is a battle whereby the oil company will try to get out of the parliament the highest possible share.? So they make loud noise so maybe somebody out there might be listening to them. But the role of the minister is to make sure that the country’s interest is protected by insisting on a fair share. I can tell you that for every one company that is planning to leave, I know of 50 new ones that are planning to come in once the door is open.”

The above is precisely why the nation must insist on framing the issues correctly in the event that the activities of the company continue to pose immediate and latent dangers to the survival of the people of the Niger Delta.

Getting the PIB passed has become necessary and important for two simple reasons: first, the government has stated times without number that it holds the key to the reforms in the oil industry; second, only a government lacking in self respect would succumb to the cheap blackmail from Shell or any other company for that matter over a bill it considers as being in the national interest.

Although, the latest spill in the Gulf of Mexico seems to have thrown up issues wider and bigger than those contemplated by the bill, issues such as equitable procedures for the management of hazards from oil prospecting activities whether the spill occurs in the Niger Delta, Alaska or in the North Sea, it seems settled on the bottom-line of government’s responsibility to take all measures necessary to protect the welfare of the citizens at all times.

That is the overriding lesson from last week’s wresting of $20 billion compensation from BP by United States President Barack Obama. For a disaster which has endured for a little over eight weeks pouring an estimated 2.5 million gallons of oil into the Gulf of Mexico each day, it seems only the beginning with the cost to BP projected to hit the $34 billion mark in direct legal and remediation costs in the months ahead.

Coincidentally, while the American government was breathing down on the neck of BP to get it to pay compensation for the spill, its officials on the Nigeria-US Bi-National Commission were also at work wringing every possible concession for Shell and the other operators. A case of different strokes for different folks!

The justice of the oil spill matter of course demands that similar cases be treated the same equitable way. Getting BP to cough out $20 billion for the Gulf of Mexico spill seems fair enough as no amount could ever suffice to compensate the victims for the massive dislocation that the spill has caused. Where are those to insist on same standard treatment for the people of the Niger Delta, who in 50 years of oil prospecting has endured a record spill of an estimated 13 million barrels?

Shell’s environmental notoriety in Nigeria is certainly well documented. A 10-year study commissioned by Greenpeace finds that although Shell operates in more than 100 countries, 40 percent of all its oil spills are recorded in Nigeria. The report further finds some of the spills running continuous for years and several others never cleaned up despite claims by Shell to the contrary. Those facts remain incontrovertible.

That is why Shell in particular needs to be told that the legislations are matters reserved for the Sovereign. There is clearly no basis in the suggestion that the country is being done any special favour should Shell choose to put its money here; neither would the country lose anything were Shell to take its $40 billion investment to other climes where fiscal practices are more favourable.

The company should therefore spare the citizens of this country the crude tactics of blackmail on some phantom investments, which, if at all, its numerous shareholders stand to recoup many times over.

Finally, I believe there is some merit in the prescription of criminal investigation into the activities of oil majors as recommended by the Delta State governor, Emmanuel Uduaghan when he hosted the visiting President Goodluck Jonathan in Asaba, last week. Aside the imperative to determine the extent of the damage to the environment, it seems to be the only way to curb the mindless arrogance of operators like Shell.

By the way, what is stopping Governor Uduaghan and other Niger Delta Governors from taking Shell to court in the Netherlands? Apart from being a good starting point in the long road to secure justice for the people, the mood in the international community for such a cause can hardly be better than the current time.


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