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Nigeria to expel Shell from its oil fields

Latest update : 2008-06-05

The president of the oil-rich African state announced on Wednesday that the company would be replaced by another operator this year, after relations with local communities turned sour and erupted in open conflict. (Analysis: D. Herbert)

Nigerian President Umaru Yar'Adua on Wednesday said Anglo-Dutch oil giant Shell would be replaced by another operator by the end of the year in the volatile Niger Delta's oil-rich Ogoniland region.
Yar'Adua told the Nigerian community in South Africa, where he is on an official visit, that "by the end of the year another oil operator will take over Shell Petroleum interests in Ogoniland," according to a statement from his office.
Speaking in Cape Town, Yar'Adua said it was clear "there is a total loss of confidence between Shell and the Ogoni people" and for that reason "another operator acceptable to the Ogonis" will take over from Shell.
"Nobody is gaining from the conflict and stalemate, so this is the best solution," Yar'Adua was quoted as saying in a statement sent to AFP.
Oil-rich Ogoniland is a hotbed of civil unrest in the Niger Delta, home to Nigeria's multi-billion-dollar oil and gas resources.
The Ogoni community is opposed to foreign oil companies -- particularly Shell, which is accused of destroying their ecosystem without paying adequate compensation.
But Yar' Adua said on Wednesday a compensation deal has already been struck with Shell for environmental degradation arising from oil spillage in the affected regions.
Shell set up base in Nigeria in 1956 when petroleum was first discovered in the country and is Nigeria's largest oil operator.
Oil companies and their personnel in the Niger Delta are being increasingly targeted by separatist militants who have stepped up a campaign of kidnappings and sabotage.
The loss of production in Nigeria has been one of the factors behind the surge in oil prices over the last two years.
Nigeria is the world's eighth largest oil exporter and was until recently Africa's largest producer until it was overtaken in April by Angola.
Angola produced 1.873 million barrels per day on average in April, trumping the 1.818 million bpd produced by Nigeria.
A Shell spokesman told AFP that the oil firm was officially unaware of the decision and therefore unable to comment.
"We have seen media reports today suggesting that the Nigerian President made certain statements about government's decision over our interests in Ogoni," he said.
"We can confirm that we have not received any formal notification about this development and are therefore unable to comment further at this time."

Date created : 2008-06-05