SHELL TO SELL FOUR MORE OIL FIELDS IN NIGERIA – THE NEED TO ENGAGE INDIGENOUS HOST LOCALS AS PARTNERS OF ASSETS SOLD

By Zik Gbemre

Now that it has become public that SHELL Petroleum Development Company (SPDC) of Nigeria has concluded plans to sell four of its oil fields in Nigeria (OMLs 18, 24, 25, 29 and the Nembe Creek Trunk Line), precisely in SPDC’s Eastern Operations of Rivers and Bayelsa States Nigeria, as part of its $15 billion global divestment plan which Shell Officials in The Hague have officially signed, we consider it necessary to rightly advise the relevant authorities of Shell to engages host community locals as ‘partners’ to share directly in the oil and gas bounty of their coast.

To this end, we advise that Shell should consider the issue of partnerships or some equity stake for the host State Governments and local communities in the said oil blocks sales. That is, Shell (SPDC) should invite the State oil companies of Rivers State (Treasure Energy Resources Ltd) and Bayelsa State (Bayelsa Oil Company) to partake as partners, and offer them some preferential equity stake in the said four oil blocks being sold. This move is imperative so that Shell (SPDC) would leave a good legacy behind in its Eastern Operations.

With the pathetic way Shell (SPDC) left its Western Operations of Delta State; where its oil blocks divestment were sold to mostly Nigerian companies who were in partnerships with foreign funding and technical partners, neither the host Delta State Government nor local communities were considered in these sales as partners, this has left the City of Warri more like a ghost city, and of course, this is not a good legacy to have been left behind by Shell. It is therefore expedient for Shell to use this golden opportunity with the current four oil blocks sales in its Eastern Operations to invite the State oil companies of Rivers and Bayelsa States as stated to partake as partners in the equity stakes.

We believe that if Shell can initiate the above described move in Alaska that positively engages host community locals as ‘partners’ to share directly in the oil and gas bounty of their coast, as reported some weeks back, then Shell can do same in its Eastern Operations of Nigeria.

An extract from the said report reads: “An Alaska Native regional corporation and six Native Village corporations signed an agreement with a Shell Oil subsidiary Thursday (7/31) that aims to share the profits from offshore drilling off Alaska’s northwest coast. Shell and the Arctic Slope Regional Corp. announced the formation of a new company called Arctic Inupiat Offshore LLC. Its participants include six village corporations on the North Slope. The agreement with the Shell subsidiary, Shell Gulf of Mexico Inc., gives the Alaska Native company the option of acquiring an overriding royalty interest from Shell’s drilling on leases in the Chukchi Sea.” And according to the Shell Alaska Vice President Pete Slaiby. He said the agreement also underscores Shell’s commitment to provide opportunities for the communities.

The report also noted that “Shell’s decision to invest in the future of the region and its people should be applauded,” Murkowski said in a statement. “This announcement ensures that the people of the North Slope Borough share directly in the oil and gas bounty off their coast. It also gives locals a say in what happens near their communities.”

Now if Shell can do this in Alaska, they can equally do same in Rivers and Bayelsa States of the Niger Delta region. The way Shell (SPDC) left Delta State ‘dry’ with no good legacy should not repeat itself in Rivers and Bayelsa States.

However, to make amends of the pathetic legacy left behind in its Western Operations (of Delta State) and to salvage the bad image of the company in the Warri Delta State, we strongly advise that Shell (SPDC) should reintroduce all its Community Development Projects/Programmes and Scholarship Programmes in OMLs 34, 30, 42 etc. Doing this will address the bad legacy left by Shell in its Western Operations, specifically Delta State. Shell should not leave Delta State like they exited from Oloibiri (where it first discovered oil over 50 years ago), with a very unattractive legacy. Shell should understand that this is where the company has operated in over fifty years and has made so much money yet without much Shell presence anywhere until more recently with the Ogoni crises.

If Shell says it initiated the Divestments of its onshore assets in the Niger Delta region to “help grow local capability”, then it should strategically involve host State Government and locals to be partners in the equity stakes of the Divested oil and gas assets. This, we believe, is the best legacy Shell can leave behind in places where it has operated in over five decades. We ask that the above advice should be given the needed attention.

Zik Gbemre, JP

National Coordinator

Niger Delta Peace Coalition (NDPC)