The temptation or peer-pressure to lie in the corporate world must be pretty intense, even when things are going relatively well. This seems to be the case with the Royal/Dutch Shell Group, the British and Dutch company inflated their production growth and reserves replacement and as a result they are under investigation by regulators in Europe and the US. This all has to do with a rift between the company’s two most powerful men, Sir Philip Watts, the company chairman since ’01, and Walter van de Vijver who occupies Watts’ old position as head of exploration and production.
According to a 4/20/04 report in the New York Times, Watts believes in reporting that the company was replacing every barrel pumped out of the ground with a new barrel of reserves (apparently they weren't). Much of this was made known through a series of memos and email messages from van de Vijver beginning in 2/02 and climaxing with an angry email response in November of ’03: "I am becoming sick and tired of lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive/optimistic bookings."
Just how inflated are we talking? The Times story by Stephen Labaton, and Heather Timmons said Shell overstated its reserves by 20% (2.3 billion barrels), the company has since been periodically revising its reserve figures downward, and both Watts and van de Vijver have resigned back in early March with the chief financial officer Judy Boynton being asked to leave as of April 19th. Shell replaces its executives using the same principle that corporate America and government uses; keep appointing suspect people, and soon the public will tire of complaining. Jeroen van der Veer also knew about the problems with the reserves for the past couple years, and did nothing, but he is the new chairman of Royal/Dutch Shell.
Of course the very words "Shell Oil" cannot linger in my mind without me thinking about Nigeria, so naturally I ask myself, how do the brothers down there feel about this issue? After all, it’s their oil (of course just try telling that to Watts, van de Vijver, Boynton, van der Veer and an infinite number of stockholders). The lagosforum.com website has some commentary by Dr. Mobolaji Aluko titled "Shell, Nigeria and Oil & Gas Reserves Revision-Sloppiness or Fraud?" According to the good doctor there has also been a $1 billion dollar lawsuit, "in fact, confidential documents from late last year show Shell concluded more than 1.5 billion barrels-almost 40% of the re-categorization and 67% of its 2.2 billion barrels of Nigerian reserves for 2002 alone." Just how big a player is Nigerian oil in the scheme of things?
They are the world’s 7th largest exporter, producing 2 million barrels a day, 80% of which goes toward its government, over 90% goes to export revenues (40% is shipped to the US, which makes up 10% of US oil imports, our 5th largest importer). The internal Shell report from which the Times story is based on states there was "no common explanation" as to why Watts wanted the overstatements in reserves in refineries located off the coast off Australia, Oman (near Arabia), Nigeria, and Brunei (SE Asia), other than to enforce his overzealous "no stone unturned" philosophy, but Dr. Aluko says that all western oil companies operating out of Nigeria must come clean Chevron Texaco, MobilExxon, Agip, TotalFinalElf, BP (of which my father jokingly claimed stood for Black People), as well as the Nigerian government, and is calling for a "battery of independent auditors" to further investigate.
Nigerian government would have to shoulder a good portion of the Blame, anytime a nation with so many resources has a 51.07 life expectancy for both males and females means government has been looking out for anyone but them. But African problems and dysfunctional tendencies run deeper than the issues regarding corruption of its outside oil distributors. They seem to aim their greatest concern on petty traditions like "female circumcision" and these internal conflicts instigated by the colonialists, rather than growing some balls themselves, and look at the big picture.
Is it too late for President Olusegun Obasanjo to train his troops to shut down or destroy their oil installations, and dictate terms to western powers on the very world stage they are used to being exploited by? Is it too late for the most powerful African nations to lead the rest of Africa into a united state controlled through oil, diamonds, and minerals grown on their own dirt, creating the only real turf war that is worthwhile for Blacks to fight. It’s never too late. Oil seizure has been attempted during March of last year when Ethnic militants attacked a TotalFinalElf facility on a Saturday morning (3/22), and threatened to take over and blow up piplines facilities belonging to ChevronTexaco, TotalFinalElf, and yes Royal/Dutch Shell. The day before, the companies had their facilities evacuated.
According to a too little-known Associated Press report, 11 oil installations were confirmed to have been taken over by the Ijaw tribal fighters, with 6 belonging to Shell’s Nigerian subsidiary ChevronTexaco. The attacks were said to be in retaliation to Nigerian army raids along the delta, and unfavorable voting boundaries. Instead of small rebel groups, imagine the impact of an official takeover led by Nigeria’s army, with the rebel groups following in unison. This sounds farfetched, but these groups must meet and resolve, how else can African nations have total final say?