Nigeria: Shell Revamp to Cost Jobs

Publisher Name: 
BBC News

The oil company Royal Dutch Shell has said it plans to cut jobs in Nigeria, so it can invest more money in better production methods.

The aim is to raise output by 500,000 barrels a day within two years, says the head of Shell's Nigeria operations, Chris Finlayson.

Shell was forced to cut proven reserves by 20% this year, allegedly after reassessing its Nigeria oil fields.

The reorganisation will mean 1,000 jobs will be cut, according to reports.

Moving offshore

"In the current extremely tight budget environment, it is essential to reduce our operating costs to allow sufficient funds for profitable investments," Mr Finlayson said.

Offices will be closed to make way for "a single corporate centre", which according to unconfirmed reports will be located in the south-eastern oil industry capital of Port Harcourt, instead of Lagos.

The company also intends to scale back its activities in the troubled oil-port city of Warri, where more than 200 people were killed last year as a result of clashes between rival ethnic militias, according to AP news agency.

A spokesman for the company would not confirm media reports that 1,000 employees, or 20% of its Nigerian workforce, would lose their jobs as a result of the reorganisation.

Correspondents say Shell's restructuring in Nigeria is consistent with moves by oil multinationals in the country to cut back on on-shore operations in the unsettled Niger Delta in favour of offshore operations, where large oil discoveries have been made.

Shell announced that Nigeria accounted for 1.3 billion barrels of the 3.9 billion removed from its proven reserves.

The New York Times reported last week that the oil company withheld the information, fearing it could jeopardise its relationship with the Nigerian government and $385m in bonus payments paid by Nigeria to Shell as an incentive to find new supplies.

AMP Section Name:Energy