Financial Times: Shell to help plug Nigeria shortfall
By Matthew Green in Lagos
Published: May 14 2008 03:46 | Last updated: May 14 2008 03:46
Royal Dutch Shell is close to agreeing a deal with Nigeria that would see the company provide loans to meet funding shortfalls that have cut production at one of its most important oil businesses.
The plan is designed to inject cash into Shells joint venture with the Nigerian government. The states failure to pay its share of costs has stalled main projects.
Attacks by militants have also contributed to a slump in Shells production in the oil rich swamps of the Niger Delta, which provided 18 per cent of Shells oil last year.
The government of Umaru YarAdua, the president, has made the funding gaps in ventures with oil companies a priority since it took power a year ago. Soaring oil prices, which hit a record $126.98 on Tuesday, have spurred talks by underlining the cost of lost output.
Ann Pickard, executive vice-president for Shell in Africa, said the company was very close to a deal. Odein Ajumogobia, Nigerias oil minister, agreed.
A senior executive underlined Shells concerns last year when he warned in a memo that Nigerias failure to pay its share posed a big risk to the existence of the venture, the Shell Petroleum Development Company.
Energy advisers to Mr YarAdua cautioned in an internal report in January that Nigerias oil production could fall by a third by 2015 if the financing gaps in joint ventures were not addressed.
The government hopes to deliver a long-term solution by restructuring its ventures with Shell, ExxonMobil, Chevron and others to allow them to raise capital on international markets, although industry experts said the scheme could take several years to implement.
Shell is offering a package of loans to the government as an interim solution to help plug its funding gap.
Mrs Pickard said Shell was near to a deal to extend loans to complete schemes stalled by the states failure to pay. Shell would recoup its money from revenues earned by the completed projects.
Mrs Pickard refused to say how much investment was planned this year but said it could grow significantly if the model was adopted for regular use. The concept, if it works going forward, is it could get to be a very big number, she said.
Shell is also close to a deal to convert about $2bn (1.3bn, £1bn) owed by Nigeria into a bridge loan to be repaid with interest. Im optimistic that a bridge loan will be completed, Mrs Pickard said. Its very important to address whats owed to us and its very important to get some of these projects going again because theyre totally stalled at the moment.
Funding gaps and militant violence have taken a heavy toll on SPDC, of which Shell owns 30 per cent and the state-owned Nigerian National Petroleum Corporation 55 per cent.
EDITORS CHOICE
China oils Nigeria talks with loan – Apr-21
Nigeria warned on oil spending– Apr-16
Nigerians question motives for inquiries – Apr-16
Copyright The Financial Times Limited 2008
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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