COMMUNICATIONS PATCHED BETWEEN SHELL AND OIL

C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000102

SIPDIS

STATE PASS DOE FOR DAS JBRODMAN AND CGAY
TREASURY FOR ASEVERENS AND SRENENDER
COMMERCE FOR KBURRESS
STATE PASS TRANSPORTATION FOR MARAD
STATE PASS USAID FOR GWEYNAND AND SLAWAETZ
STATE FOR DS/IP/AF, AF/EX, DS/IP/OPO, DS/ICI/PII, DS/DSS/ITA

E.O. 12958: DECL: 01/26/2016
TAGS: EPET PGOV ASEC PTER KHLS PINR ETRD CASC NI
SUBJECT: COMMUNICATIONS PATCHED BETWEEN SHELL AND OIL
CONTRACTORS IN HOSTAGE CRISIS

REF: A. LAGOS 101 AND PREVIOUS

B. LAGOS 90

C. ABUJA 120

Classified By: Acting Section Chief Shannon Ross for Reasons 1.4 (D & E
)

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SUMMARY
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1. (C) USG and HMG interests, views, and actions have
remained tightly aligned during the Shell contractor hostage
crisis. However, we have noted a growing gap between Shell
and the contractor companies Tidex and Ecodrill. Shell is
concerned the contractors are engaging in a line of
communication via Ecodrill's intermediaries outside of GON
negotiation channels which could backfire on Shell. Tidex is
unhappy with pressure to return to service in Shell's EA
field. Mission and UK representatives took action today to
close this gap, meeting with Shell Africa Executive Vice
President Ann Pickard. Pickard readily agreed to our plan to
continue full information sharing among the governments and
companies; to pursue communication with the kidnappers via
Ecodrill's intermediaries; and for the HMG and USG to take
responsibility for sharing this line of communication with
the GON only at the highest levels. Pickard pledged Shell's
full support and assets for the safe return of the hostages.

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SHELL LAYS OUT COMPLAINTS WITH CONTRACTOR STRATEGY
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2. (C) In today,s crisis response group meeting, the
Shell representative laid out several points in a forceful
manner, raising concerns for both USG and HMG
representatives. The meeting necessitated clarification of
our policy position at a higher level within Shell.

--The Shell representative told us his brief was specifically
to protect Shell's political and reputational interests.
Shell cannot be seen as working outside of official
government negotiation channels, now delegated to Bayelsa
State, but will not prevent their contractors from doing so.
Shell is very sensitive about their corporate reputation
given past difficulties in the Delta. (reftel B) He told us
any information disseminated within Shell regarding the
alternate line of communication with the kidnappers would
inevitably be leaked to the GON.

--The Shell representative told us Shell has a strong policy
against the payment of ransom. He demanded to know the
HMG,s views on the payment of ransom. He stated if any
large payments are made, the GON and state security services
will find out about it, and "it will not be helpful for us."

--The Shell representative criticized continuing with the
line of communication through Ecodrill representative
Quiatkowski,s intermediaries, and told us he foresaw the
contact only ending in demands for payment. (Note: Neither
Tidex nor Ecodrill have suggested or supported the payment of
a ransom. End note.) He sought assurances that if the
contractors paid a ransom, HMG would not hold Shell
accountable if their assets were then used to carry out the
evacuation plan.

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TIDEX COMPLAINTS WITH SHELL
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3. (C) Tidex Vice President McNee meanwhile has his own
complaints about Shell. McNee states Shell operational
personnel are pressuring Tidex to return the Liberty Service
into service in the EA field. (Note: This pressure does not
seem to be authorized by Shell upper management, but is at
the working level. End note.) During the course of the
initial attack on the Liberty Service, the attackers
reportedly warned Tidex not to return the vessel to that
area. Tidex VP McNee believes its return could endanger the
hostages, as well as present a significant risk to personnel
in the EA field. He resents pressure from Shell to return to
operations while the hostages remain in captivity. Shell
confirmed another contractor,s vessel has gone to the EA
Field to take the place of the Liberty Service. Tidex and
Ecodrill are sufficiently concerned that their interests have
diverged from Shell,s that Tidex requested Control Risks
Group (CRG) dispatch their own security consultant, rather
than making use of the CRG consultant provided by Shell.


4. (C) Shell states that its first priority remains the safe
return of the hostages. However, returning the EA field to
full operation is clearly on their radar screen. For Tidex
and Ecodrill, the safe return of their employees remains
their overwhelming priority, although they are also concerned
with maintaining their on-going commercial relationship with
Shell.

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Cracks in the Crisis Group Patched for Now;
Obtaining Buy-In from Shell Management
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5. (C) In the interest of resolving this growing gap,
British Deputy High Commissioner Waterworth, Acting Consul
General Howe, Energy Off, and Tidex VP McNee met this
afternoon with Shell Africa Executive Vice President Ann
Pickard to clarify our policies and lines of communication
with Shell. Waterworth explained the views of the two
governments and two contracting companies:

--We greatly appreciate Shell,s support during the hostage
crisis, provision of manpower and meeting space, and
Shell,s offer to evacuate the hostages from the Delta after
their release.

--We are committed to full transparency and information
sharing with Shell; information shared with the contractor
companies will be shared with Shell.

--The HMG, USG, and the contract companies have made a
collective decision to pursue the lines of communication
opened up by Ecodrill,s Peter Quiatkowski. This
communication has provided the most recent and repeated proof
of life, and has enabled us to send medicine to the hostages.


--The USG and HMG share Shell,s position regarding not
paying ransom. No financially-oriented ransom demands have
been made through Ecodrill,s intermediaries; at this point,
we do not anticipate any.

--The USG and HMG will manage information sharing at a high
level within the GON regarding the existence of an alternate
line of communication with the kidnappers. Disclosure of
this alternate communication line is confidential to Shell,
and should be closely controlled within Shell.


6. (C) Pickard readily agreed to the talking points, and
re-iterated her commitment to full information sharing with
the USG and HMG, as well as the contractor companies. She
also re-iterated Shell,s total support for duty of care and
all logistical arrangements for the evacuation of the
hostages after their release. Pickard will relay our
agreement to her representatives on the crisis response
group.

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COMMENT
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7. (C) Despite friction between the companies, cooperation
and communication between the governments and companies
involved remains very good. We are fully satisfied with the
results of today's meeting with Shell EVP Pickard. We will
continue to monitor the relationships between the companies
and our information sharing to ensure that everything
possible is done to secure the hostages' release. End
comment.
HOWE