Walking the Dog: Shell CEO Meets with Nigerian President Friday
We are prepared for whatever we face, said Shell CEO Jeroan Van der Veer in Davos, Switzerland while attending the World Economic Forum. Later this week, the Shell CEO will be facing Nigerian President Umaru Yar'Adua to discuss what can be done to restart production in the battle-ridden country.
"Conditions must improve for us to restart production," said Van de Veer, "and we're not there yet."
Over the past several years, Shell has faced hijackings, hostage situations, and holdups in the leading oil exporter of Africa.
The Associated Press reported that attacks carried out by the Movement for the Emancipation of the Niger Delta (MEND) and other armed groups over the past two years have cut Nigeria's oil exports of 2.5 million bbl/d by more than 20%, adding pressure to global oil prices.
Just last month, Shell announced it would cut costs and jobs in Nigeria because of pressure from the government to change the terms of its contracts and also because of attacks from local insurgents.
Still, Shell remains steady in its forward progress in the region and elsewhere, considering the fluctuation of oil process as a common market factor to be considered while planning operations.
"We don't speculate on oil prices of the future," said Van de Veer. "We simply take it as it is, and then we make sure in that business environment we do the best possible job."
Van de Veer said Shell prepares itself for the unexpected consequences of the market by envisioning three types of scenarios when planning for the future: high oil prices, low oil prices, and the yo-yo.
The question one should ask is who is holding the yo-yo, and who is the yo-yo. Maybe Friday's meeting between Van de Veer and Nigeria's president will provide the oil and gas industry with a very important answer.
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