Africa Speaks Reasoning Forum

Shell advised to retreat from Nigeria
By Christopher Hope, UK Telegraph
Business Correspondent

(http://newsimg.bbc.co.uk/media/images/39407000/jpg/_39407807_nigeria_oilwomen203.jpg)

Shell was in full damage limitation mode again yesterday
after commissioning a report that recommended it pull out of
Nigeria - its fourth-largest oil producing region - in five
years.

The oil and gas giant, already in crisis over "losing" more
than 20pc of its proven reserves, also admitted that "we
sometimes feed conflict by the way we award contracts" in the
African country.

Shell commissioned a report last year from a Lagos-based
conflict resolution organisation into the problems faced by
Shell in Niger River delta.

The 93-page report, parts of which were published yesterday,
recommended Shell might have to leave the area by 2009
because of rising ethnic tension.

A Shell spokesman said: "That date is in there. It is the
view of the report's authors, but it is not a view with which
we would agree."

He continued: "There is serious conflict in the delta and
that has the potential to get worse if action is not taken."

Shell yesterday published its annual report on sustainable
development, which included parts of the leaked report into
the problems in Nigeria.

In the report, Emmanuel Etomi, sustainable community
development manager for Shell Petroleum Development Company
of Nigeria, accepted that the oil industry was "inadvertently
contributing" to the conflict in the country.

He wrote: "In 2003 we enlisted three internationally known
conflict experts to better understand how our activities are
affected by and contribute to the conflict."

The experts highlighted "how we sometimes feed conflict by
the way we award contracts, gain access to land and deal with
community representatives; how ill-equipped our security team
is to reduce conflict; and how drastically conflict reduces
the effect of our community development programme," he said.

Ethnic violence has spiralled over the past four years in
Nigeria, home to about 130m Christians and Muslims.

Amnesty International claims that clashes between the two
groups have claimed at least 5,000 lives since 2000. More
than 1,000 people died in an outbreak of clashes in 2001.
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Half of Shell's reclassified reserves are in Nigeria.

Analysts dismissed the suggestion that Shell would pull out
of Nigeria. Bruce Evers, analyst at Investec Securities,
said: "It seems like a PR own goal."

Shell Transport's shares closed up 5 at 400p.