The Guardian: Nigerianisation: Shell's solution for troubled delta: “The reserves scandal that led to Sir Philip's removal in part related to Nigeria”

Terry Macalister

Wednesday July 21, 2004

Shell yesterday took a first step towards trying to rebuild its damaged credibility in Nigeria by becoming the first oil company to appoint a local to head its operations there.

Basil Omiyi becomes managing director of Shell Petroleum Development Company of Nigeria, a job once held by the group's disgraced former chairman, Sir Philip Watts.

The reserves scandal that led to Sir Philip's removal in part related to Nigeria, where Shell is the biggest foreign operator. About 1.3bn barrels of the 3.9bn in overbooked reserves came from the west African state, which is plagued by civil unrest in the oil-rich Niger delta region.

Abuja politicians were furious when told that Shell was downgrading its oil assets in the country to bring reserves into line with the requirements of the United States securities and exchange commission.

Shell was already in trouble with the government over allegations that it had abused an incentive scheme.

Yesterday local papers and the main oil trade union expressed delight that a Nigerian had been given a top job.

"That's cheering news. That's exactly what we've been fighting for for 40-something years, that a Nigerian should head the operations of a major multinational here," the president of the white-collar oil workers' union, Brown Ogbeifun, told Reuters. Bello Oboko, leader of the Federated Niger Delta Ijaw Communities militant group, described the move as a "good omen".

Mr Omiyi, 58, takes over from 48-year-old Briton Chris Finlayson, who becomes head of Shell's entire Africa business in October. The oil group has been trying to reduce tension in the Niger delta through "Nigerianisation" - appointing locals to senior jobs.

http://www.guardian.co.uk/business/story/0,3604,1265505,00.html