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Nigerian oil probe traps Shell in net

Daily Mail

Wednesday, March 18, 2009

Testing times: News the oil major is being included in the corruption probe spooked investors

OIL giant Shell is at the centre of an embarrassing bribery investigation which could lead to the imposition of hefty fines.

The anti-corruption story appeared as the Anglo-Dutch firm surprised investors with a pledge to hike the dividend 5pc.

But it was news that a corruption probe into Nigeria’s oil industry had been broadened to include Shell itself that spooked the market, sending its ‘A’ shares down 21p to 1619p.

‘Shell is currently under investigation by the United States Securities and Exchange Commission and the United States Department of Justice for violations of the US Foreign Corrupt Practices Act,’ the firm said in its annual report, released yesterday with a strategy update.  

Incoming chief executive Peter Voser said an internal inquiry has been launched in to the actions taken by a contractor working for the oil major in Nigeria. Ten companies are being investigated as part of the probe.

‘It (the probe) is about potential payments made on our behalf to customs in Nigeria,’ he said. ‘We are now involved in that investigation.’

On trading he pledged to boost payouts to investors’ despite ‘testing times’ in the industry.  Dividends for 2009 are expected to be around 7.1bn.

The firm said: ‘Dividends are an important statement of confidence in the future, and Shell is the only company in the sector to have already announced dividend growth plans for 2009.’

Rival BP is taking a more prudent stance, freezing its dividend payments this year for the first time in almost ten years. Plunging oil prices have caused, panic in the industry with firms cutting back on exploration and developing plants. But Shell said it will invest £22.8bn in its portfolio of projects, along with a raft of cost cuts. The axe is likely to be taken to jobs.

The firm said annual production growth would rise between 2 and 3pc in the next decade. Net reserves stood constant at the equivalent of 11.9bn barrels.

It was a rare year in which the amount of oil pumped did not exceed that added to reserves.

Shell has also halted investment in wind and solar power to focus solely on biofuels as part of its push into renewables. 

Daily Mail Article

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