Shell Withheld Reserves Data to Aid Nigeria

Shell Oil recently downgraded its oil reserve estimates by 20%, sending the company's stock spiraling and investors panicking. Now, reports indicate that Shell's revisions include a downgrading of its Nigerian reserves by 60% - a diminution the company has kept "confidential in view of host country sensitivities." The fragile Nigerian government, which depends on oil export for the bulk of its income, has been relying on the earlier, larger estimates to earn a bigger production quota from the Organization of the Petroleum Exporting Countries (OPEC). Shell and the government have long had a close relationship, as was exposed in the scandal of 1995 in which Shell and the government were accused by international organizations of involvement in the death of a prominent anti-Shell activist. Although Nigeria is rich in oil, it relies on Shell's technology and financing to extract its natural reserves. Other governments of developing countries and oil companies also rely on this marriage of interests. But with the exposure of Shell's inaccuracies, these relationships may come under greater international scrutiny. – YaleGlobal