Royal Dutch Shell PLC is "cautiously optimistic" over its chances to reconcile with locals and return to Ogoniland in Nigeria, Shell Nigeria's chairman said in its annual sustainability report.

Below is an article written by Benoit Faucon published by Market Watch:

Royal Dutch Shell PLC is "cautiously optimistic" over its chances to reconcile with locals and return to Ogoniland in Nigeria, Shell Nigeria's chairman said in its annual sustainability report.

But the president of the Movement for the Survival of the Ogoni People, or Mosop, whose campaign against Shell in the 1990s contributed to its departure, expressed skepticism over the company's optimism.

The Anglo-Dutch oil major stopped operating in Ogoniland in 1993 after the company was hit by a wave of protests from locals over its operations in the Niger Delta area.

"Overall, I am cautiously optimistic. ... Government and the traditional rulers both tell us they want us to come back," the chairman, Basil Omiyi, said in the report published Tuesday on its Web site.

"In my meetings with Ogoni leaders they have talked about putting the past behind us and sitting around the table to talk. It will take patience and understanding, but I think we will get there," he added.

"I wish I could say what's giving (Shell) that optimism," Ledum Mitee, Mosop's president, said in an interview.

Mosop has led the protest against Shell, but Mitee said that even a committee set up by President Olusegun Obasanjo to broker peace between the Ogonis and the Dutch oil company has failed in its efforts.

The committee, led by Matthew Kukah, a priest, has planned a church service in Ogoni, as part of efforts to reunite the two parties to the dispute, but Mitee said the process is flawed.

"They are trying to lure us through the eyes of religion," he said.

The government confirmed in October 2006 Shell could keep its oil license in Ogoniland for at least another year to give the company time to resolve its problems with the Ogonis.

Regarding unrest in the parts of the Delta in which it operates, Shell Chief Executive Jeroen van der Veer said in the report "no, we aren't thinking about leaving."

Omiyi said the unrest was largely due to poverty, "the way the Delta is represented in national politics" and "the rise of organized crime, fueled by large-scale thefts of crude oil."

"The four Delta states where we operate now typically get more than $3.5 billion a year from the federal government. However, the money is not being properly used, because of corruption and a lack of local capacity to invest it," Omiyi said.

"Think of these as overlapping circles - the bigger the overlap, the bigger the crisis. The approach of the presidential election has made the current crisis so big," he said.

Shell said last week that as a result of the unrest, 178,000 barrels a day of production remained shut down on a net basis at its Shell Petroleum Development Co. joint-venture.

In the sustainability report, Shell said 96 cases of bribery and fraud were reported in 2006 for the company worldwide, leading to the departure of 143 staff and contractors.