nerPostTitle">GROUP SAYS SHELL'S PLAN TO DIVEST IS EVASIVE Written by furtune Business Mar 2, 2010

Group says Shell's plan to divest is evasive
By Ben Ezeamalu
March 2, 2010 04:57AM Shell says divestment of some of its assets in Nigeria, is part of its global restructuring. Photo:REUTERS

The warning by Shell Petroleum Development Company that Nigeria's declining oil output would be aggravated if the Petroleum Industry Bill (PIB) is passed into law is an attempt to frustrate the move by Nigeria to bring sanity into the sector and recover some level of sovereignty in relation to the resource, the Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) has said.

ERA/FoEN's position is coming in the wake of widely publicised reports in the media indicating that Shell is suspending new investments in Nigeria, especially in the deep offshore where the PIB stipulates conditions that will benefit the nation.

Reforming the oil and gas industry
The PIB came into being following an attempt by the present administration to undertake a reform process in the oil and gas sector in order to improve the sector's efficiency.

Along with ExxonMobil and Chevron, Shell has voiced its opposition to key sections of the PIB which allow the Federal Government to renegotiate old contracts, impose higher costs on oil companies and reclaim oil fields that oil companies are yet to explore. The companies will also be forced to give back unused land from existing oil licenses to provide new investors an opportunity to operate in Nigeria.

Shell's Regional Executive Vice President, Ann Pickard, had, last week, warned that proposals to impose tougher terms on oil companies as part of the sweeping reforms in Nigeria's oil industry would be ruinous.

'We refuse this attempt to meddle in our internal affairs. Shell's sloganeering on Nigeria's declining oil output and the sustained publicity blitz on plans to divest from the country is a calculated arm-twisting tactic to get the Nigerian government to back down on laws that will make the oil companies accountable to the Nigerian people,' said ERA/FoEN Executive Director, Nnimmo Bassey.

Mr. Bassey said that oil majors operating in Nigeria's oil industry have always been economical when it comes to disclosing information about oil revenues, gas flaring, and environmental justice in host communities.

'We totally reject Shell's media whitewash on declining oil revenues. The PIB should be expeditiously passed into law and applied in operations in the oil and gas sector. This will help ensure better environmental protection, better revenue returns and accountability,' he said.

'For us, the PIB is primarily about the management of existing fields while Nigeria rapidly moves to a post-petroleum regime with a halt to new oil field activities that have so far been the alchemists' pot; brewing corruption, violence and unimaginable degradation of the Niger Delta.'