The outstanding tax issue will delay the final investment decision (FID) on developing Shell’s Bonga Southwest deepwater oilfield, one of Nigeria’s largest with production expected to reach 180,000 barrels per day, Mr Brown said.
“We’ll need to resolve that before we ever FID the Bonga Southwest project,” he said.
Shell has made progress with the government on some basic terms for operating the field but a decision on its development was now unlikely to be made in 2019. “Bonga Shouthwest’s FID may slip into next year,” Mr Brown said.
Separately, in the Gulf of Mexico, he said Shell planned to move swiftly to develop the Whale discovery, which it announced in January 2018. Shell holds a 60 per cent stake in the field and Chevron the remaining 40 per cent.
“We’re going to crack on with the development of this project,” he said, without giving a specific timeline for the development except to say it would be “fast”.
Mr Brown said the field had the potential to be developed into a new production hub for Shell in the Gulf of Mexico.
Shell and many of its peers have been cutting costs sharply for developing large offshore fields to compete with cheaper sources of oil such, as US shale.
The development comes after a two-decade fight over whether Shell contributed to the execution of nine Nigerian oil-industry critics landed at the company’s doorstep.
A court in The Hague, Netherlands heard its first arguments earlier this month, as part of determining if Shell played any role when the military dictatorship ruling Nigeria convicted nine men, including well-known activist Ken Saro-Wiwa, of murder and then executed them in 1995.
Shell has strongly denied any connection to the executions, saying it in fact requested clemency to prevent the death sentences, according to Bloomberg.
The company “did not collude with the authorities to suppress community unrest, it in no way encouraged or advocated any act of violence in Nigeria, and it had no role in the arrest, trial and execution of these men”, Shell’s Nigerian unit said. “We believe that the evidence clearly shows that Shell was not responsible for these distressing events.”
The Hague court will make a judgment on May 8 but “it is not clear if that will be the final one”, Sabrina Tucci, a campaigner for Amnesty International said on Twitter.