Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point
On Air
Feedback
Low Graphics
Help

Monday, February 8, 1999 Published at 13:54 GMT


Business: The Company File

Shell to invest $8.5bn in Africa

Shell wants to exploit new oil fields off-shore

The oil giant Royal Dutch Shell has proposed to develop a number of large oil fields off the coast of Nigeria, in what would be the largest industrial investment ever in sub-Saharan Africa.


Barnaby Phillips: An ambitious plan to reactivate Nigeria's energy industry
The company said it planned to invest $8.5bn over the next five years. If the venture goes ahead, it would revitalise Nigeria's energy industry and give Shell's operations in the country an enormous boost.

Ronald van den Berg, chairman of Shell's Nigerian subsidiary, said Shell and its partners would bear around 70% of the costs while the Nigerian government would have to provide the rest.


[ image: Shell's new oil facilities could produce around 600,000 barrels a day]
Shell's new oil facilities could produce around 600,000 barrels a day
Shell already produces about half of Nigeria's daily output of two million barrels of oil. New discoveries of oil reserves, and the prospect of Nigeria's virtually untapped vast natural gas resources, have encouraged the company to embark on a massive expansion plan.

A string of financial disputes with the Nigerian government and the global fall in oil prices could have dissuaded Shell from committing such large sums of money.

However, the fact that the new oil fields are based off-shore will have eased Shell's decision. During recent years international oil companies in Nigeria were badly affected by political unrest.

Part of the attraction of the new oil discoveries is that they have all been off-shore and are therefore much less prone to the disruption which has severely affected output in the Niger delta.

Shell in Nigeria

Shell hopes that its investment will be seen as a gesture of confidence in the current transition programme from military to civilian rule.


[ image: Shell's operations in the Niger delta have been troubled by accusations of environmental pollution]
Shell's operations in the Niger delta have been troubled by accusations of environmental pollution
It also intends to show that it has not been deterred by the unrest in the delta, where local communities demanding a greater share of oil wealth launched a series of attacks on oil installations and workers.

The plan will rely on the co-operation of several other multi-national companies who are involved in joint production ventures with Shell. The Nigerian government, which has not committed itself to the proposals, would be expected to make an investment of over $2bn during the next five years if they went ahead.

In recent years, oil companies have accused successive Nigerian governments of not meeting their commitments to invest in the industry, but Shell estimates that this plan would earn the Nigerian government about $20bn over the next 25 years.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Company File Contents


Relevant Stories

21 Sep 98 | From Our Own Correspondent
Nigeria tastes freedom

01 Jan 99 | Africa
Oil prices threaten Nigerian economy

06 Nov 98 | Africa
Fighting the oil firms





Internet Links


Shell Nigeria

Royal Dutch Shell Group


The BBC is not responsible for the content of external internet sites.




In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles