IN NIGERIA, SHELL’S ONSHORE ROOTS STILL RUN DEEP

So while SPDC has cut oil production in the Delta by 70 per cent since 2011, when it first started reporting data on spills, the incidence of spills and theft from pipelines has fallen at a much lower rate and has picked up again recently

Royal Dutch Shell wants to reweight its footprint in Nigeria to focus on oil and gas fields far offshore, away from the theft, spills, corruption and unrest that have plagued the West African country’s onshore industry for decades. But for the company that pioneered Nigeria’s oil industry in the 1950s, the Niger Delta remains as important — and problematic — as ever.

While Shell has cut onshore oil production and sold some onshore assets, it continues to invest in others. In fact, onshore production has risen in recent years as a share of Shell’s output in Nigeria, an analysis of company data over the past decade shows.

Much of the increase comes from less polluting gas, used mainly in power generation, which Shell thinks will be key to the transition to lower carbon energy. Gas made up 70 per cent of onshore production in 2017, up from 47 per cent in 2008.

The company still controls thousands of kilometres of pipelines connecting inland fields to coastal terminals through its subsidiary, Shell Petroleum Development Co of Nigeria (SPDC), however. So while SPDC has cut oil production in the Delta by 70 per cent since 2011, when it first started reporting data on spills, the incidence of spills and theft from pipelines has fallen at a much lower rate and has picked up again recently, the data shows.

Shell’s Nigeria Country Chair Osagie Okunbor hinted it was a sensitive balancing act.

“We are too big just to see ourselves as ‘there is a problem and we have to run’. That is not what we are thinking of doing,” he told reporters on a media trip to the country in July. “But at the same time we don’t want to spread our footprint.”

Two pipeline spills in 2008 in the small community