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Multinational oil giant Royal Dutch/Shell named a Nigerian to head its largest African subsidiary Tuesday, an appointment industry analysts said was a bid to appease Nigerian unions and ethnic groups threatening production shutdowns.
LAGOS, Nigeria -- Multinational oil giant Royal Dutch/Shell named a Nigerian to head its largest African subsidiary Tuesday, an appointment industry analysts said was a bid to appease Nigerian unions and ethnic groups threatening production shutdowns.
Basil Omiyi becomes the first African to hold such a senior post for an oil multinational. His promotion comes as multinationals increasingly turn to oil-rich west Africa as an alternative supplier to the Middle East.
The 58-year-old Omiyi will become managing director of Shell Petroleum Development Company of Nigeria Ltd. Sept. 1.
Shell is the biggest oil company in Nigeria, accounting for half of the 2.5 million barrels pumped daily here. Nigeria is Africa's largest oil exporter, the world's seventh-largest oil exporter and the fifth-biggest source of U.S. oil imports.
Omiyi, who joined Shell as a petroleum engineer in 1970, said he was "honored to be the first of what I expect will be many Nigerians to hold the post."
Nigerian labor unions and ethnic leaders welcomed the appointment, saying they hoped it signaled the start of real change. The groups have repeatedly threatened to shut down oil production to protest the relative absence of Nigerians in top management positions.
Industrial disputes, ethnic clashes, sabotage of wells and kidnappings of oil workers by militants have at times in the past year shut down nearly 40 percent of Nigeria's oil production.
"That's cheering news. That's exactly what we've been fighting for 40-something years, that a Nigerian should head the operations of a major multinational here," said Brown Ogbeifun, president of the nation's main white-collar oil workers' union. "It's a victory for all of us."
Bello Oboko, leader of the Federated Niger Delta Ijaw Communities ethnic militant group, called Omiyi's appointment a "good omen."
"But they should also allow host communities of oil-producing areas to have important jobs. They should give us our own fair share," Oboko told The Associated Press.
Omiyi is a native of Edo state, where relatively little oil is drilled.
Some industry analysts called the appointment part of a long-term attempt to calm labor and ethnic groups in the Niger Delta, where most of the nation's oil is drilled.
Shell stock and oil prices did not appear to move following the appointment.
"It is a positive for the company ... to try to temper the volatile nature of that local ethnic clash potential," said Jason Kenney, head of oil and gas equities research at ING Financial Markets in Scotland. "It is a consoling move in some ways."
Omiyi's appointment also could "improve the perception of the company" by Nigerians, including disgruntled residents of impoverished communities in the oil-producing delta, oil analyst Kunle Osinuga of the Lagos-based Center for Petroleum Information said.
Yet Shell and other companies would continue to import workers from Europe, Asia and North America in cases where their skills could not be found in Nigeria, Kenney said.
Nigeria's oil industry faces other challenges.
Ogbeifun, the union leader, did not rule out a national oil workers' strike threatened next week over pensions and demands for repairs to government-owned oil refineries.
A threatened strike by workers of Franco-Belgian oil giant Total's Nigerian subsidiary forced the company to stop oil and gas production for a week this month.
Omiyi will succeed 48-year-old Briton Chris Finlayson, who will retain the role of country chair for Nigeria and assume the role of chief executive officer of Shell Exploration and Production in Africa.