The position of Shell BP on gas flaring ,environmental degradation and other issues in Niger Delta: A web chat with Shell BP

• Presubmitted Question
Hello,
I have to questions for consideration, for the dialogue tomorrow:
1. How are you managing the local content requirements in Nigeria? (meeting your staffing requirements while satisfying the Nigerian government and local communities that you are providing employment to local people)
2. How is Shell working with the academic community in Nigeria to increase the supply of young people who can join the energy industry in the years to come?
Bet regards,
Edouard de Guitaut
Director & Co-Founder, energy-future.com
Posted at 13:42
•
Olav Ljosne
This answer is for Edouard de Guitaut's question:

1.Local content covers staff and products/services. The majority of Shell staff are Nigerian. However, we also have a number of expatriates working in the Shell operations in the country, a number which to a large extent is balanced with the Nigerians that have been given assignment in other Shell companies worldwide. This enable cross learning and development in a very effective way.
On products and services we are much aware that local production and local contractors are best places to support our business. With local content we both have Nigerian and Niger Delta in mind. Our objective is to contribute to the economic development of Nigeria through sustainable growth in the Nigeria content of our business by encouraging and supporting the development of manpower, acquisition of technology by Nigerian businesses and maximizing opportunities for the participation of Nigerian businesses in our operations.
2.Skills and capacity building are key. We have for years been supporting Nigerian universities through different means, we are sponsoring chairs at the universities, and we have a major scholarship programme for students at Nigerian universities. Between 3,500 an 4,000 students are presently receiving scholarships from Shell.
The Shell cooperation with univestities covers:
Þ Shell Professorial Chairs
Þ Research & Development Projects
Þ Sabbatical Attachments
Þ Research Internships
Þ Graduate Awareness (Attraction) Program
Þ Shell Guest Lectureship and Summer Schools
Þ Shell Assessed Internship
Þ Release of non-proprietary data to University based researchers
Þ Book and equipment donation/laboratory upgrade
Posted at 13:50
•
Shell team member 1
Hello everyone, and welcome to this Shell Dialogues session. In total, 445 people have registered to take part in this chat. We'll give you more updated information about participation as the chat progresses.
Thanks to those of you who have pre-submitted questions. We received a lot of those and our team has already started answering them. They will be posted very soon on your screen.
Some of the questions already received are very specific, and we do expect a lot more questions during this session given the interest for the subject. We may not be able to answer all of them in the allotted time, particularly those relating to specifc issues, but we will do our best.

As always, all registrants will receive an email from us when the transcript with the questions and answers is posted on Shell Dialogues.
Posted at 13:54
• Presubmitted Question
Dear Bjorn

I would like to discuss the following question

How often do you remind your majority partner in Nigeria to honour its commitments to “mitigate any negative inputs from your joint activities” (Shell Business Principle 6)?

I look forward to the discussion this afternoon

Regards Peter Murry

Bjorn Edlund
Thanks for your question, Peter - this principle is present and alive in all our activities and discussions in the joint venture. Why would a company want to cause "negative inputs"? And if you do, inadvertantly, they should be mitigated.
Posted at 13:58
• Presubmitted Question
This is a presubmitted question from Ayodeji Adebola

I live in Nigeria and I have been to the Niger Delta which is where Shell carries out the majority of its operations. It is very hard for me to reconcile the touting of Shell as an environmental friendly company and the degradation I see there.

Now, my questions are these: (i) why is Shell still flaring gas in defiance of the Government's strong warnings? (ii) Why lose $2.5 billion annually when the gas can be harnessed? (iii) Is Shell not taking the easy way out, instead of investing in technologies to prevent gas flaring?

Nick Wood
Ayodeji, thanks for your question. The Shell Petroleum Development Company of Nigeria wants to put out the flares and has achieved a lot. So far, more than $3 billion has been invested on gas gathering facilities and the amount of gas flared is 60% lower today than it was in 2002 - this includes the impact of lower production due to security issues. There are plans to collect the gas that is still continuously flared but these have been delayed by security problems, that have meant it is just not safe for staff to work, and by funding shortfalls by the majority partner in the joint venture, the government. Completing the gas gathering programme will cost more than another $3 billion.
Posted at 14:01
• Fiona
Does Shell plan to integrate assessment of human rights impacts into its assessment processes in the Niger Delta, following the piloting of this approach in Oman? If so, when will this happen?

Richard Dion
Thanks for your question.
We do incorporate human rights issues when making business decisions and have increasingly been looking at human rights in our impact assessment processes. We have used the Danish Institute for Human Rights tools in this work. We have undertaken an internal project on integrating human rights into our project cycle which will see the insertion of human rights references in project guides. Regarding specific assessments in Nigeria, all projects look at environment, social and health impact assessments, which include aspects of human rights.
Posted at 14:01
• Presubmitted Question
As a Shell customer, I would like to ask you a question regarding the welfare of the localities (people and environment) of the oil fields and processing areas for your products. Do you take or intend to take full responsibility for leaving these places better than or at least in as good condition as you found them? If so how will you do this?
Yours sincerely,
Louise Brookes

Nick Wood
Louise, the principles we follow in our operations or projects anywhere in the world are to protect the environment and find ways for people affected by our operations to benefit. In Nigeria that happens in a number of different ways. Shell contributed $82 million last year to community development in the Niger Delta. In total, including the contribution of all our partners in the joint venture, that came to about $240 million. In addition we look to maximise the contribution of local people and companies to the business through employment and contracts. 95% of our staff are Nigerian. Last year 90% of contracts were awarded by the Shell Petroleum Development Company of Nigeria to Nigerian companies.
Posted at 14:04
• RON EDEMA
Greetings,
Posted at 14:04
• Presubmitted Question
First of all, thank you for accepting this web chat about doing business in Nigeria, challenges and questions.

I have always wondered : have you ever thought of the consequences of some of your activities, like polluting the living place of thousands of people?
Like the example given in the montly journal of June of Amnesty International France :
burning gas => air pollution => acid rains => health problems + deterioration of soils for agriculture.
Don't you think it is YOUR responsability?

Sincerely,
Mel V

Bjorn Edlund
Mel - We always want to be available for dialogue.

As for your question - of course we think about the consequences of our business activities. You raise the bigger issue about fossil fuels. The energy system that the world has built still depends on fossil fuels, and it looks like this will continue to be the case for decades to come. Now, with the climate change debate and the coming Copenhagen summit, we also see how the world tries to respond - finding ways to cap emissions and progress other forms of energy. We play a role as a company, that's for sure. And we take this responsibility seriously.
Posted at 14:08
• Presubmitted Question
In November 2005,a high court sitting in Benin city Nigeria, delivered a landmark judgement in a case between Shell and Jonah of Iwherekhan community in Delta state, against continuous flaring of gas in Nigeria. Why has Shell continued to flare gas even when this judgement has never been challenged? Also on Thursday, 2nd July, 2009, Nigerian Senate passed a bill that ends gas flaring by December 2009, what is your comment on this?
Among the many demands of the Ogoni people in Nigeria, was that Shell pays for what they call "35 years of oil theft" from their land. In one of his many speeches, Ken Saro-Wiwa urged the Ogonis to demand for this money as precondition for commencing further oil exploitation in Ogoni. When will Shell pay this money?
AkpoBari Celestine
Ogoni-Nigeria

Alice Ajeh
Celestine,
In the November 2005 case,the High Court has granted Shell's motion for a stay of execution of the ruling,pending the hearing of the apppeal filed by Shell.
On the Senate Bill, Shell acts in accordance with applicable laws of the country. We are as concerned as you to see continuous flaring stopped. In SPDC operations, flaring has dropped by 30% due to the associated gas gathering projects we have embarked on. Including the reduction due to shut in production due to the security situation, flares have gone down by 60% between 2002-2008.
Shell pays royalties and taxes to the Federal Government as required by law.
Posted at 14:08
• Peter Murray
But Bjorn, could you tell us how often you have the dialogue with your local partners - daily weekly once in a blue moon?

Bjorn Edlund
Peter - We have weekly and monthly more formal and organised meetings, but we work alongside our partners at many levels every day.
Posted at 14:10
•
Shell team member 1
We're getting a few off-subject questions on fuels, on Shell activities in European countries, etc. We'll not respond to those now, but will pass them on to our appropriate colleagues so they can get back to you.
Posted at 14:10
• aggy
Shell has said that their data on gas flaring showed ‘no huge overriding concerns’. What does this mean? Can we see the data?

Nick Wood
Aggy, thanks for the question. The World Bank has reported that the environmental and health significance of glas flaring in the Niger Delta was low. Any negative effects of flaring are confined to the immediate vicinity of the flare and will have little or no impact on the health of the local populations.

To add some more perspective, the Shell Petroleum Development Company of Nigeria has fewer than 110 flares in an area the size of Portugal.
Posted at 14:10
• Presubmitted Question
I was stuck by this sentence in the ‘Independent’ on 1 July:
“Independent auditors estimate that up to 13 million barrels of oil
have been spilt in the Delta, an amount equivalent to an Exxon Valdez
disaster every year for 40 years”. What steps are Shell taking to
clean up the environmental pollution caused by what seem to be lower
working standards than those that operate in the UK?

For example: An oil spill occurred at Kira Tai in Ogoniland on 12 May
2007. What steps have been taken to clean up the pollution caused and
have the communities adversely affected received any form of
compensation? Why has Shell ignored the investigation’s finding that
corrosion was the cause of this spill?

Phil Adams

Olav Ljosne
Thanks Phil,
We are as concerned about oil spills as you are. Remember that the majority of spills follows attacks at our installations, cutting into pipelines or spills that follows the oil theft which is a major problem.
To be able to assess damages and clean up as speedy as we want to, it require safe access for our staff. This is not always the case in the Niger Delta, and our handling of the spills get an unfortunate delay. Following access we stop leaks and make an assessment together with authorities and community what clean up is required. Irrespective of reasons for the pollution, we are cleaning up.
We are not producing oil in Ogoniland, and left in 1993 because of the safety of our staff. We are anyway cleaning up where leaks appear, and all information about reasons for the spill is handled very carefully by our teams.
Posted at 14:12
• Kal-El
What percentage of your workforce in Nigeria are from local communities? Do you have training practises in place to train local work forces rather than gathering people from outside the country.

Bjorn Edlund
In the staff workforce, some 60 percent of the workforce come from local communities. In the affiliate workforce (contractors), the percentage is much higher.
Posted at 14:13
• Presubmitted Question
From Fiona McLaren: Will Shell commit to stopping all gas flaring in the Niger Delta?
Will Shell commit to conducting reports into the human rights impact
of their work in the Niger Delta and ensure this is made available to
local and international communities?
Will Shell commit to acting to stop all oil spills in the Niger Delta
promptly, followed by a swift and thorough clean up?

Thanks

Basil E. Omiyi
Shell has continued to express her commitment to ending routine gas flaring in the Niger Delta, demonstrated by the US$3.0 billion so spent on the programme and and achieved reduction of some 60% since year 2000 levels. It will require some US$ 3.0 billion additional investment to complete the programme. As you can imagine, how fast we progress this depends on resolving the industry funding challenge( hopefully to be resolved by the Govt.proposed industry restructuring) as well as the security situation in the Delta.
Shell has been committed to achieve best pratice in oil spill mitigation through improved asset integriy programme. But you must be aware that in 2008 , some 85% of the volumes of oil spilled was caused action of criminal gangs involved in crude oil theft or wilful damage to pipelines by militants. This needs to be addressed by the government security agencies.
Shell by her Business Principles and signatory to the Volunary Principles on Human rights approach these matters responsibly.
Posted at 14:14
• Presubmitted Question
Dear Shell Dialogues,
Thank you for allowing this opportunity at e-dialogue. My questions: what do you propose to do about gas flaring?
Many thanks,
Phil Moore

Alice Ajeh
Phil,
Thank you for your question.
We acknowledge your concern as well as that expressed by many at the continued flaring in Nigeria - we share those concerns and want to stop flaring. Between 2002-2008 the SPDC operated joint venture has reduced associated gas flaring by more than 30% by the investment of over $3 bln in gas gathering projects such as gas gathering plants and an extensive pipeline network to collect gas from more than 1,000 wells scattered across the Niger Delta. Including the impact of reduced production because of the security situation, flaring has reduced by 60% in this period. This gas is now harnessed for domestic use and for LNG supply.
More than $3bln further investment is needed to complete the gas projects as we plan- but that will need improvements in security and funding solutions - the government partner had been unable to fund its share of the projects.
We are committed to working with government on this important issue. SPDC and the rest of the industry in Nigeria continues to discuss actively with government the necessary steps to eliminate flaring as well as the regulatory regime associated with gas flaring.
Posted at 14:17
• tyc
A comment at the conclusion of the discussion: Good job, Shell, for inviting and answering these candid questions. Whether everyone agrees, or not, with activities, your willingness for dialogue is appreciated and sets a model for other companies.
Posted at 14:17
• ifufu
Hello,
The Nig Govt recently announced that the licence for Shell's Ogoni fields have been revoked and Ogoni community leaders have said they do not want Shell to return to Ogoni. Questions are:1. Is Shell ready to accept the decision of the Nigerian Government and Ogoni people and leave Ogoni land?
2. Does Shell believe it can still operate in Ogoni land? If the answer to this is no, what are the qualifications of the new company that you will like to see succeed Shell in
Ogoni? If yes how soon do you think Shell will be able to return to Ogoni?
3. Why did Shell settle the Wiwa case out of court? Was it partly to compensate the victims of the military oppression in Ogoni so as to enable Shell to return to Ogoni land?or was it to avoid the rendering of a guilty verdict on Shell's role in the Ogoni crisis?

Thanks.

Basil E. Omiyi
The Government did not revoke Shell's Licence in Ogoniland. Government has expressed preference for another party in the Joint Venture to operate the Ogoni oil fields. The party they would like to hand the operatorship to is the operating arm of NNPC who is the majority partner in the joint venture.
Shell fully accepts this and it is line with the Joint Venture's Joint Operating agreement (JOA) which states that any of the four partners can operate the fields.
Posted at 14:22
•
Shell team member 1
We're getting the same question many times repeatedly, so please check whether the question you're asking has already been answered before submitting. This will allow us to cover as many subjects as possible. Thank you.
Posted at 14:22
• Vero
Hello

Why is Shell not disclosing the information they have related to assessment of the environmental, social and human rights impacts of all oil and gas projects in non-technical language?

Olav Ljosne
Hello Vero
Thanks for your good question which basically is a comment. We are an oil and gas company and our language tend to reflect so,- and sometimes too much in our communications. I am very open to have concrete comments as we try to be as informative to as many stakeholders as possible.
Olav
Posted at 14:22
• maryella
In resource rich countries, there is a long history of tendencies toward corrupt practices between extractors and governments due to the immensity of the wealth being generated. In Nigeria, this history has been long documented, and the government continues to have a strong reputation for corruption. What is Shell doing to move toward more transparency and accountability? Are you supporting the EITI in Nigeria, and if so, what steps are you taking to comply?

Richard Dion
Maryella, thanks for your question. We have been involved with EITI from the very beginning, drafting some of its earlier principles and working with governments in Nigeria, Gabon and Cameroon specifically regarding implementation. We were the first company to publish what we paid to the Nigerian government. Shell is also represented on the Board as well as on the Stakeholder Committee in NEITI.
Posted at 14:24
• Becky
Hello, I have a couple of questions: i) Will Shell support an independent assessment of the environmental and social impacts of its operations in the Delta, including the provision of access to all relevant reports and studies since (and before) it began its operations in the Niger Delta? ii) Shell states its commitment to contribute to sustainable development through its decision-making; and in its business principles Shell states that “We continually look for ways to reduce the environmental impact of our operations, products and services”. Is Shell willing to adjust its Business Principles to take this further by committing to also rehabilitate all its sites to their previous condition, or better, where a negative impact on communities and the environment has occurred as a result of its operations? Thanks, Becky

Nick Wood
Becky. We regularly work in partnership with NGOs and other organisations in our community development work which involves assessments of the impacts and needs of people and the environment.

The Shell Petroleum Development Company of Nigeria (SPDC) is supporting an independent assessment of the impact of oil spills on the environment in Ogoni land, being led by the United National Environment Programme.

SPDC does restore operational sites and sites where there have been spills. We report information related to this at http://www.shell.com/home/content/nigeria/news_and_library/publications/dir_briefing_notes.html
Posted at 14:24
• christopher
Hello,
I will like to ask this question to Bjorn Edlund. Examining the overall Corporate Governance Policy of Shell, There is a focus on corporate social performance (CSP). How is this CSP institutionalised to benefit the Nigerian society especially the niger delta where Shell is operating?

Bjorn Edlund
You will find a lot of information on the Shell Nigeria website. Let me pick out a few facts - in 2008, Shell-run companies in Nigeria awarded contracts worth more than 900 million dollars to Nigerian companies. We employ some 6,000 people in Nigeria - both direct staff and contractors. Shell contributed 58 million dollars to the Niger Delta Development Commission in 2008, as required by law. So there are many ways we institutionalise the benefit to local society, as you phrase it. The main benefit of course is our economic contribution. Our Nigerian company SPDC contributed more than 34 billion dollars to the federal government between 2005 and 2008.
Posted at 14:25
• Fred
Shell's EA crude blend production in Nigeria resumed on July 2 after being halted for more than 3 years. What level of production are you at currently and when do you expect to reach the level prior to the outage, which was I believe 150,000b/d? Also, when do you expect the force majeure clause on EA exports to be lifted? Regards, Fred

Olav Ljosne
Hello Fred,
Thanks for your question, and I can confirm that we are back in production from the EA field. We never publish daily production figures. The production level before shut in after militant attack in February 2006 was 115,000 barrels of oil a day.
Olav
Posted at 14:27
• Fiona
Does Shell believe that pollution and environmental damage associated with the oil industry (including oil spills, gas flaring, waste disposal, river dredging) over the past five decades has contributed to poverty and conflict in the Niger Delta?

Basil E. Omiyi
Yes, but even more so is the baseline demand of the people of the region for the Federal Govt. to grant them greater share of the oil proceeds( a political matter), as well as corruption, criminality, and general poor governance.
Posted at 14:27
• charlessheridan
Has Shell been able to look at my question about modifying refineries to use co2 as a feedstock? Charles Sheridan

Shell team member 1
Hello Charlessheridan,
We are exclusively focusing today's discussion about our operations in Nigeria, but we will pass your question on to our colleagues in the appropriate department and ask them to get back to you.
Posted at 14:28
• inroads
How much money is made as profit from Nigerian Oil? How much of it stays in Nigeria? thank you, Louise

Bjorn Edlund
Luoise - Nigeria depends on oil for about 80 percent of government revenue. As I said in a previous answer, our Nigerian company SPDC contributed more than 34 billion dollars to the government 2005-2008. The government receives some 95 percent of the revenue after costs from our onshore production, which is managed by SPDC.
Posted at 14:30
• PaulAtJustmeans
Bjorn, I am sure Shell conducts tests etc to ascertain what the effects to the total environment (waterways, seas, air, human etc) might be or have been regarding the business activities, are there any reports available that we can see?

Bjorn Edlund
Paul - you can look for the answers in the Shell Sustainability Report, which is available on our website.
Posted at 14:32
• joatham
How does Shell enforce the commitments it makes to not engage in any bribery or corruption, including not accepting a bribe, facilitation payment or kickback? Are you really able to stop your employees from engaging in such behaviour?

Richard Dion
Joatham, thanks for your question.

Before we enter any country, we ensure that we can comply with Shell's General Business Principles. Principle 3 regarding business integrity makes it explicit regarding bribes and facilitation payments. It has happened that we have had to terminate contracts for violation of business principles and we report on this publicly in our annual Sustainability Report. Several years back, we established an Ethics and Compliance Office which I think demonstrates our commitment in this area.
These habits are part of society, no company can be entirely immune, but that's why we have a clear policy, backed up by an enforcement programme, with terminations.
Corruption is bad for business, and can have financial as well as legal implications.
Posted at 14:35
• Dawn
Security reports rank the security situation in Delta and Rivers States as "stable" and "medium". However, it appears that there recently has been a measurable increase in attacks on oil companies in these areas. Due to a pipeline attack, Chevron had to stop production. At what point would Shell decide that it simply isn't possible to continue operating in Delta and Rivers States?

Olav Ljosne
Hello Dawn,
Thanks for your question. Not sure what reports you are referring to, but you are right that we have had an increase in attacks against installations and kidnapping recently . We are producing oil and gas in several states in the Niger delta, and staff safety is our prime focus. Where installations and pipelines are attacked we stop the production.
Olav
Posted at 14:35
•
Shell team member 1
Quite a lot of questions have just come in. All the team members here are working to get as many as possible answered in the next half hour. You can still send new questions for the next 15 minutes.
Posted at 14:35
• Veen1966
Hello,

will Shell stay in Nigeria regarding the attacks on oilpipelines?

Alice Ajeh
Hi,
Although the situation is challenging,Shell is in Nigeria for the long haul. We have been in Nigeria through a very difficult time in her history-the civil war. We have a genuine desire to work with the communities and the government to find solutions to the problems faced in the country. As a Nigerian myself, I'm proud of the contributions we make. In the past four years for instance, SPDC has contributed more than $34b to the government. About 95% of the revenue after costs from our onshore operations in Nigeria are paid to the government in taxes and royalties. Shell employs about 6,000 staff and contractor staff, 95% Nigerian