Shell's Corrupt Shell Game in Nigeria

Under fire from shareholders, and facing investigations in the United States, the United Kingdom, and the Netherlands for misrepresenting its oil reserves, Royal Dutch/Shell is trying to shift the blame to Nigeria.

Confidential company documents made available in late March suggest that Shell withheld vital information on the extent of the downward revaluation of its Nigerian reserves - by 1.5 billion barrels (60% of the country's total reserves) - because it wanted to strengthen Nigeria's hand in negotiating with OPEC to increase the country's production quota. Nigeria presently produces two million barrels per day. OPEC calculates member countries' quotas based on proven reserves.

Nigeria, grappling with a worsening economic crisis, wants to double daily production to four million barrels, to reflect new discoveries that the Nigerian National Petroleum Corporation (NNPC) claimed in December 2003 had increased reserves to 34 billion barrels. Officials also argue that Nigeria's large population relative to other OPEC members, and the urgent need to earn foreign exchange to invest in infrastructure and social services, necessitates preferential treatment. Shell claimed it did not want to jeopardize these negotiations by making public the true state of its Nigerian reserves.

To continue reading, please log in or enter your email address.

To read this article from our archive, please log in or register now. After entering your email, you'll have access to two free articles every month. For unlimited access to Project Syndicate, subscribe now.


By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.