Mutiu Sunmonu, country chairman for Shell Nigeria, said it
was difficult to make commitments without clarity over the terms of the
Petroleum Industry Bill (PIB), legislation which will change the fiscal and
regulatory framework in the OPEC member.
"Just looking at deepwater alone, we have a portfolio
of about $40 billion worth of projects...but we will not be able to make a move
on these until we have a landing on the PIB," he said in an interview at
his Lagos home late on Wednesday.
"(That is) potential investment that we are not able to
sign off on at this time," Sunmonu said.
Nigeria says the PIB will make state oil firm NNPC more
competitive and transparent, encourage investment, promote local oil company
involvement in the industry and increase gas supplies to the dilapidated
domestic power sector.
But international oil companies are worried the bill will
impose higher taxes and royalties while failing to address key issues of
under-funding, corruption and security.
The bill has been repeatedly delayed by revisions and
disagreement. It has stalled again in its final stages as President Goodluck
Jonathan, who took over last month following the death of late President Umaru
Yar'Adua, and new Oil Minister Diezani Allison-Madueke revisit some of the
issues.
With elections due by next April at the latest, the new
administration has little time to push the bill through, but Sunmonu voiced
optimism that differences could be overcome.
"The present government is determined to pass the
PIB... I know the minister is planning to have a meeting with captains of
industry to further consult with us on how to close the gap."
Sunmonu also said he had brought to the Oil Ministry's
attention the need to renew onshore licenses which lapsed under the previous
administration, saying government had pledged to "dispose of all these
legacy issues as quickly as possible."
Sunmonu said security in the Niger Delta, where three years
of militant attacks since early 2006 have prevented Nigeria from pumping much
above two thirds of its 3 million barrels per day (bpd) capacity, had greatly
improved since an amnesty last year.
But he said bunkering — the theft of industrial quantities
of crude oil — had increased.
"I think there is an increase in the level of bunkering
in the last few months, there is an upward swing. I always use an estimate of
about 100,000 bpd and I don't think that would be too off the mark," he
said.
The Niger Delta, home to Africa's biggest oil and gas
industry, has suffered decades of pollution from spills which have been left to
fester, damaging the air, soil and water.
The US government's all-out fight to contain the BP oil
spill in the Gulf of Mexico is a marked contrast to the situation in the Niger
Delta, leading local communities and campaigners to ask why Shell and other
international oil firms in Nigeria are not paying compensation.
Sunmonu said the comparison was not fair, noting that
between 2000-2007 10,000 barrels a year were spilled on average from Shell
operations in the Niger Delta, 70-75 percent of them the result of sabotage or
oil thieves drilling into pipelines.
In 2009, just 2 percent of spills were caused by factors
within Shell's control, he said.
"It is incorrect to draw a parallel ... The law in
Nigeria is very clear. We do not pay compensation for sabotage spills. And I
think the intent of the law is correct," he said.
"If you pay for sabotage spills then you are only
fueling more sabotage and more spills. Where a spill happens as a result of our
own error or equipment failure, we do pay compensation."
The Anglo-Dutch giant says it paid $4 million in
compensation last year and cleans up all spills whatever their cause, although
communities or armed gangs sometimes deny it access to spill sites.
Sunmonu said he was not concerned by China's reported
ambition to secure 6 billion barrels of Nigerian oil, saying Shell was
"not afraid of competition." Analysts say China is most likely to
access Nigerian reserves by snapping up acreage in new licensing rounds rather
than buying existing operations. But China has approached the Nigerian
government about some blocks held by Western firms.
Sunmonu said he was not aware of any direct approach to
Shell by China about buying stakes in Shell Nigeria joint ventures.
