A Review of the Nigerian Energy Industry

Shell set for setlement talks for Nigerian spills

Anglo-Dutch supermajor Shell is likely to face ‘tens of millions’ of dollars in bills as it prepares for settlement talks after accepting liability for two oil spills in Nigeria in 2008.

The case against Shell and its Nigerian subsidiary, Shell Petroleum Development Company (SPDC), results from two massive oil leaks in 2008 caused from a double rupture of the Bodo-Bonny Trans-Niger pipeline that pumps around 120,000 barrels of oil per day.

Lawyers representing some 69,000 Nigerians living in the Bodo community, who started court proceedings against the two companies in April, said Wednesday that Shell has formally accepted responsibility for the two leaks.

The firm quoted Shell as saying: “SPDC accepts responsibility under the Oil Pipelines Act for the two oil spills both of which were due to equipment failure. SPDC acknowledges that it is liable to pay compensation – to those who are entitled to receive such compensation.”

“Negotiations will now proceed on the level of compensation to be awarded,” a spokesperson added to Upstream.

“We will be pressing Shell for clean up to start within weeks, overseen by our experts, and we would be looking to get individuals paid within 6 months.”

Meanwhile, an SPDC spokesperson told Upstream: “SPDC has always acknowledged that the two spills which affected the Bodo community, and which are the subject of this legal action, were operational.

“As such, SPDC will pay compensation in accordance with Nigerian law. The legal process is continuing and could take several months to reach a conclusion.”

The spills have caused devastating damage to the environment, in particular in the waterways of the fishing community as well as the areas’ mangroves, causing devastating pollution to the entire Bodo creek, say lawyers Leigh, Day & Co.

The damage is estimated to have affected an area of 20 square kilometrers with some estimates putting the amount of oil spilt at around 20% the amount that leaked into the Gulf of Mexico following the BP Deepwater Horizon disaster.

A United Nations Environment Programme on the impact of oil pollution on Nigeria’s Niger Delta, which is also rife to locals bunkering oil and sabotaging oil pipelines, is due to be published on tomorrow.

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  • Why threaten a copanmy that is doing what you want done? It does not make sense. It would easily cause them to rethink the strategy or get less for the assets if they continue to sell them.