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.

This image of Shell as a sensitive, caring company mocks the evidence. At the heart of Shell's oil reserves scandal is the desire for profit and the elaborate mechanisms that it nurtured in collaboration with corrupt military dictators over the years to ensure that its operations yield enormous dividends at the expense of ordinary Nigerians.