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Identifier
Created
Classification
Origin
05LAGOS563
2005-04-14 08:57:00
CONFIDENTIAL
Consulate Lagos
Cable title:  

SHELL SAYS NIGERIA NEEDS OVERHAUL

Tags:   NI  PGOV  PREL  EPET 
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This record is a partial extract of the original cable. The full text of the original cable is not available.

140857Z Apr 05
						C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000563 

SIPDIS

E.O. 12958: DECL: 04/11/2008
TAGS: NI PGOV PREL EPET
SUBJECT: SHELL SAYS NIGERIA NEEDS OVERHAUL


Classified By: Ambassador John Campbell per 1.4 b and d



1. (C) Summary: Shell Petroleum Development Corporation
(SPDC) Managing Director (MD) Basil Oyimi told Ambassador he
is concerned with President Obasanjo's "over-personalization"
of reform. The lack of institutional underpinnings means
Nigeria will be "back to square one" in 2007. Oyimi argued
Nigeria needs a long-term institutional custodian for reform,
which would focus on the civil service, security, and
anti-corruption and good governance throughout every level of
government. This structure should be led by someone like
finance minister Okonjo-Iweala, he maintained. Oyimi
solicited USG support in selling the idea to President
Obasanjo and to the international community. The Ambassador
responded that Washington and other capitals would require
clear reasons for supporting such an initiative and would be
wary of Nigeria establishing yet another corrective
institution. End Summary.


Oyimi: We Need Ministry of Transformation


--------------------------





2. (C) SPDC MD Oyimi told Ambassador President Obasanjo had
achieved modest gains under his reform program. He worried,
however, the president had overly personalized the process,
without creating the necessary institutional framework to
sustain reform beyond his tenure. Obasanjo's personalization
of the reform process meant the next president in 2007 would
likely follow suit by creating new versions of watch-dog
agencies such the Economic Financial Crimes Commission (EFCC)
and Independent Corrupt Practices Commission (ICPC) and
staffing them with "his people."



3. (C) Oyimi argued Nigeria needs "a transformation
ministry," that would focus on reform over a ten-year
horizon. This ministry or structure should receive heavy
organizational support from the World Bank and UNDP and
should focus on civil service and police/security reform. It
should right-size government, insist on professional
competency, and most importantly, in Oyimi's view, inculcate
anti-corruption and good governance values across every tier
of government.

Ngozi Type Should Lead It; Hand of Oil Companies
and International Community Must Be Invisible


--------------------------

-



4. (C) Oyimi said normally this type of initiative should
be spearheaded by the Vice President, but VP Atiku was
anathema to Obasanjo. The new ministry could not appear to
be imposed on Nigeria and the public would accept only a
Nigerian at its helm. The leader of the organization would
also require impeccable international credentials. Finance
Minister Ngozi Okonjo-Iweala or "a man like her" would be the
ideal candidate in Oyimi's view.




5. (C) Asked about the role of major oil companies and that
of the international community, Oyimi replied he is still in
the brainstorming stage and has not yet broached the concept
with industry counterparts. The U.S. and the international
community are needed to sell the idea to Obasanjo but they
should not be seen as its architects. Obasanjo is good at
"taking a sketch and running with it, but will resist if he
thinks his hand is being forced."

Use "Legacy" To Hook Obasanjo but
Where's the Hook for International Community?


--------------------------

-



6. (C) Oyimi predicted the "legacy" argument would resound
most with Obasanjo. The proposed structure/ministry would
complement the president's "economic legacy" and should be
pitched to Obasanjo as the "governance legacy." Through this
structure, Obasanjo would help ensure that reforms did not
end with his tenure. Oyimi's external affairs director
Precious Omuku stated the National Political Reform
Conference (NPRC) might serve as a vehicle for advancing this
proposal.



7. (C) Ambassador took note of the proposal and said it had
apparent merits. He advised, however, the international
community would be wary of yet another new Nigerian
governmental or quasi-governmental body. The GON, he said,
had a habit of creating new structures to deal with old
problems. Moreover, the Ambassador noted that to some degree
the problems Oyimi sought to address -- incompetent civil
servants, bloated state and federal bureaucracies, etc. --
were internal Nigerian issues. The USG other international
partners would be interested in two things as it considered
whether to support this initiative: 1) How does the
redressing of these internal GON deficiencies benefit their
interests? and 2) What will ensure the efficacy of the new
proposed structure/ministry?



8. (C) Oyimi responded that "transforming" Nigeria's civil
service and inculcating anti-corruption and good governance
values would make Nigeria more attractive to new foreign
investors. It would also improve the environment in which
current investors, including U.S. firms, operate. The
uniqueness of this initiative is that it would be the first
to combine security, transparency, and governmental
performance under one organizational umbrella.

SPDC Faces Challenges but Progressing Relatively Well


--------------------------



--------------------------





9. (C) Changing gears toward Shell's more traditional
vocation, SPDC staff told Ambassador that SPDC was doing
relatively well in Nigeria, but faced serious challenges,
including community unrest, bunkering, lack of access to
Ogoni land, aging assets, and pipeline sabotage. The biggest
challenge, they maintained, was lack of funding from the GON
for joint-venture projects. The president, they said, would
like to grow oil revenues, but in order to accomplish this,
SPDC needs more capital investment from the GON.


--------------------------


Comment


--------------------------





10. (C) The proposed "transformation ministry" is
interesting. However, Oyimi did not adequately address our
bottom-line questions of how would such a ministry benefit
USG interests and why would this body work any better than
the current structures. The conversation held at Oyimi's
initiative, illustrates, however, that the biggest single
player in Nigeria's oil and gas sector is concerned the
current reform effort has shallow roots and its life span may
be no longer than Obasanjo's tenure. End Comment.
BROWNE