Shell slams Nigeria's oil reform bill, says it 'lacks insight'

By Joel Olatunde Agoi (AFP) – 5 hours ago

ABUJA — Anglo-Dutch oil group Shell Tuesday criticised Nigeria's oil bill fashioned to reform the oil and gas sector, saying mistakes in it, if passed into law, will take years to correct.

"The simple, passionately stated priorities of government have been completely lost in a cumbersome document that lacks insight into the very basics of our industry," Shell's vice president for Africa Ann Pickard said.

"If passed in the form currently proposed, its mistakes will take years to correct," Pickard told participants at the Nigeria oil and gas conference, warning the country could lose billions of dollars in investment in the next decade.

The oil producers believe "the bill will effectively end investment into Nigeria's deepwater."

"The analysis suggests that -- no matter which version of the bill you look at all or almost all proposed deepwater projects between now and 2020 will become uneconomic... approximately 50 billion dollars wouldn't be invested as planned," she said.

She said that the bill should address issues of multiple taxes and royalties among a litany of concerns of the international oil companies (IOCs) and other stakeholders before it is passed.

The bill is still before the national assembly where 56 changes suggested by the IOCs were being taken into account, junior oil minister Odein Ajumogobia said.

"The federal government does not want to worsen the investment climate in Nigeria. The few changes that have been made are to improve the bill," he said.

"Nigeria is too rich to be poor. Let us build on our mutual resources, people and vision to get the policy and actions in our industry right," added Pickard.

Acting President Goodluck Jonathan told the delegates his government was committed to comprehensive reform of the sector.

"We have come to a new era of partnership, built on trust, shared values and beneficial equitable interest," he said.

"I want to reassure ... our foreign partners of our unwavering commitment to pursuing the reform in this sector with an eye on our national interest primarily and also in meeting the market demand for energy," he said.

Lawmakers from some of the oil-producing states and rights groups blasted the bill for failing to address the environmental, social and human rights impacts of the oil industry.

Shell's boss meantime reiterated the oil giant's decision not to pull out of Nigeria.

"Take it from me, Shell has no plans to pull out," she said, in reaction to recent media speculation.

Pickard said Shell had achieved a lot since 2005, including supplying of more than three quarters of Nigeria's domestic gas and building a new power plant that increased national grid capacity by about 20 percent.

But she lamented that Nigeria's oil production has fallen in recent years.

Its "share of global oil production is shrinking with it -- it has fallen just over 30 percent since 2005," she said.

Shell, one of the main oil operators in Nigeria, has seen part of its almost one million barrels per day output cut because of strife in the Niger Delta, where militia movements claiming to represent the interests of local people have attacked oil installations and kidnapped oil workers.


At the peak of the attacks, the violence slashed Nigeria's overall crude production by about one million barrels a day, which saw Angola overtake it as Africa's top oil producer.

She said that Angola, among other countries, catching up with Nigeria.

The southern African country has drilled more oil wells than Nigeria in the past decade, she said.

"Angola... has eclipsed Nigeria in performance over the last decade. It has drilled more exploration wells than Nigeria every year since 1999 except one," she said.