Interesting story this one. For fifty years, Shell and Nigeria’s future has been intertwined despite the lethal consequences. But now things are changing.
According to press reports, the Nigerian government has withheld up to $1bn as part of a production-sharing agreement while the two sides are locked in talks over how to pay for new investments in the oil industry.
Meanwhile President Umaru Yar’Adua is taking a harder line on historic oil contracts, many of which are being renegotiated. Shell says that 95 per cent of profits from its joint venture go to the Nigerian federal government. But Nigeria believes that it has been shortchanged by the oil majors.
“The whole Shell position is looking vulnerable,” one person told the Guardian. “I don’t want to make predictions, but we are not too optimistic. There’s a change in the environment. I am expecting this year to be very rough.”