US embassy cable - 03ABUJA1286

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 001286 
 
SIPDIS 
 
 
E.O. 12958: DECL: 07/24/2013 
TAGS: EPET, PHUM, PGOV, PINS, NI 
SUBJECT: NIGERIA: CLOSER DIALOGUE WITH THE OIL COMPANIES 
 
Classified by Ambassador Howard F. Jeter; reasons 1.5 (b) and 
(d). 
 
 
1.(C) SUMMARY: On July 15, Ambassador Jeter hosted the first 
"Three Plus Three" meeting of the Managing Directors of the 
three major U.S., U.K. and Dutch oil companies together with 
the three corresponding Chiefs of Diplomatic Missions in 
Nigeria.  ExxonMobil was unable to attend but the other two 
expressed appreciation for this meeting and asked that the 
group meet again in August. Prior to that meeting, the 
Ambassador and the British High Commissioner will raise 
mutual concerns on oil theft and insecurity in Warri with 
President Obasanjo.  END SUMMARY. 
 
 
2.(C) The Embassy organized and hosted July 15 a meeting with 
the Managing Directors of Anglo-Dutch Shell and ChevronTexaco 
(CTX), the British High Commissioner and the Dutch Charge 
d'Affaires. Shell's Director for External Affairs, Precious 
Omuku accompanied the Shell MD and the CTX MD was joined by 
visiting Corporate GM for Security Scott Taylor and 
International Relations Manager Cedric Lavington -- both 
based at CTX Headquarters in San Francisco.  Although 
invited, ExxonMobil was unable to attend.  The British High 
Commission's Economic and Political officers also attended as 
well as Embassy Abuja's RSO, RAO, DAO, Economic Counselor, 
Economic(Energy) Officer and Corporate Responsibility Officer 
(CRO). 
 
 
3.(C) After introductions by the Ambassador, CRO briefed the 
group on the Voluntary Principles on Security and Human 
Rights and plans for the Principles' implementation in 
Nigeria, starting with an intensified dialogue with the GON. 
Specifically, CRO pointed to the desired October 2003 
conference among local stakeholders -- the companies, 
Government of Nigeria agencies, and Delta communities -- to 
launch a formal dialogue on best practices in the Delta. 
 
 
4.(C) The Ambassador described the inaugural 
"Three-Plus-Three" meeting as an attempt to strengthen the 
Embassies' support for the companies and work with them and 
the GON to improve security and the protection of human 
rights in the oil producing areas of the Delta.  Shell's 
Managing Director, Ron Van Den Berg then briefed the group on 
Shell's problem with oil theft from pipelines largely in 
Delta State, a crime he compared with the drug trade in its 
ability to produce a large payoff.  According to Van Den 
Berg, the GON has made some progress  curbing this 
large-scale diversion, which had reach as much as 100,000 
barrels per day (bpd) by March 2003.  Shell is now reporting 
losses between 5,000 and 30,000 bpd throughout its system, 
though the Shell MD expressed doubts this lower level would 
be sustained.  He bemoaned the release from jail of suspects 
arrested with stolen oil, and called on the federal 
government to take stronger measures against the Abuja-based 
figures that he alleged were behind this crime.  Van Den Berg 
also expressed hope in attempts to track stolen oil by 
"fingerprinting" suspect oil shipments showing up at West 
African refineries outside Nigeria using chemical analysis to 
determine the precise source of the oil. 
 
 
5.(C) A discussion then ensued as to how the GON could better 
protect oil operations of Shell and CTX.  CTX's MD Jay Pryor 
recounted a July 14 meeting company MDs had with President 
Obasanjo and his senior security staff during which Obasanjo 
appeared genuinely attentive to the concerns of the oil 
industry.  Scott Taylor of CTX's San Francisco headquarters 
opined that Obasanjo has become focused on the law-and-order 
crisis in Warri and seems prepared to take decisive action. 
The British High Commissioner characterized the Warri crisis 
as the most serious crisis facing Nigeria today and added 
that the perceived fraud that marred the April elections in 
key oil-producing states of Delta, Bayelsa and Rivers further 
destabilize the political and security environment. 
 
 
6.(C) The President reportedly asked for the names of the 
major figures behind the trade in stolen oil, a request to 
which the Shell MD demurred, saying the identification of the 
culprits was a responsibility for the government's security 
services. "Everyone around the President knows the barons 
behind the crime," insisted the Shell boss.  According to 
Pryor, the President pledged to commit $50 million for the 
purchase of small river boats and other equipment for the 
army and navy personnel to patrol the waterways of Delta 
State better.  The CTX MD noted, however, that the Presidency 
seems to lack a comprehensive strategy for restoring security 
in the Warri area. 
 
 
7.(C) Prompted by oil companies' concerns over the poor 
performance of Nigerian police assigned to the Delta, 
Ambassador Jeter reviewed a proposal he had previously 
discussed with the MDs.  As a way of addressing the severe 
police training deficiencies, the oil companies could fund 
improvements to the physical infrastructure of the country's 
four major police training schools.  To complement this 
assistance, the Embassy would focus part of the existing 
INL/ICITAP Police Reform program on special human rights and 
community police training for police deployed to the Delta. 
The CTX and Shell MDs voiced their  support for this 
collaborative idea. 
 
 
8.(C) The two MDs encouraged the three Embassies to raise 
concerns over oil theft and insecurity in Warri with the 
Presidency. Shell's Van Den Berg specifically asked that we 
tell Obasanjo "he must stop letting the (oil stealing) barons 
go." Ambassador Jeter and the British High Commissioner 
agreed and discussed jointly approaching Obasanjo in the near 
future.  While both Shell and CTX reiterated their opposition 
to any large-scale GON security operation in the Warri area, 
they expressed displeasure with the lack of any movement 
towards restoring security in this area where oil production 
(over 280,000 barrels per day) has been shut-in since 
mid-March 2003. 
 
 
9.(C) Comment: This meeting provided an excellent start for a 
sustained and closer dialogue with the companies.  Post 
sought to focus this initial gathering on a topic of 
immediate concern to the companies -- oil theft and security 
concerns -- but will seek to expand the dialogue to include 
human rights concerns and community development in future 
meetings.  A likely future agenda topic will be a discussion 
of the companies' security agreements with the GON and 
whether these meet the standards set out in the Voluntary 
Principles.  Post would appreciate any suggestions from AF or 
DRL on items for the August meeting's agenda. 
JETER