Monday, February 8, 1999 Published at 13:54 GMT
Business: The Company File
Shell to invest $8.5bn in Africa
Shell wants to exploit new oil fields off-shore
The oil giant Royal Dutch Shell has proposed to develop a number of large oil fields off the coast of Nigeria, in what would be the largest industrial investment ever in sub-Saharan Africa.
Ronald van den Berg, chairman of Shell's Nigerian subsidiary, said Shell and its partners would bear around 70% of the costs while the Nigerian government would have to provide the rest.
A string of financial disputes with the Nigerian government and the global fall in oil prices could have dissuaded Shell from committing such large sums of money.
However, the fact that the new oil fields are based off-shore will have eased Shell's decision. During recent years international oil companies in Nigeria were badly affected by political unrest.
Part of the attraction of the new oil discoveries is that they have all been off-shore and are therefore much less prone to the disruption which has severely affected output in the Niger delta.
Shell in Nigeria
Shell hopes that its investment will be seen as a gesture of confidence in the current transition programme from military to civilian rule.
The plan will rely on the co-operation of several other multi-national companies who are involved in joint production ventures with Shell. The Nigerian government, which has not committed itself to the proposals, would be expected to make an investment of over $2bn during the next five years if they went ahead.
In recent years, oil companies have accused successive Nigerian governments of not meeting their commitments to invest in the industry, but Shell estimates that this plan would earn the Nigerian government about $20bn over the next 25 years.
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