A Review of the Nigerian Energy Industry

Shell to challenge $5bn Nigeria oil spill fine

19 July 2012, Sweetcrude, LAGOS – SHELL will challenge a $5 billion fine imposed on it by the Nigerian government over an offshore oil spill last year, a statement by the company on Thursday said.

The December leak at the Bonga oilfield, which spilled roughly 40,000 barrels of crude into the Gulf of Guinea, is Nigeria’s worst offshore spill in more than a decade.

When the penalty was announced earlier this week, Shell insisted there was no basis for the fine since it had acted quickly to contain the spill.

The latest statement by the local Shell Nigeria Exploration and Production Company, SNEPCo, gave the first indication that the firm planned to contest the decision.

“SNEPCo will challenge any attempt to impose such a penalty,” the company’s Managing Director Chike Onyejekwe said in the statement.
The company has said the source of the leak was a flexible line linking a production vessel to a tanker.

Peter Idabor, the head of the state-run National Oil Spill Detection and Response Agency, NOSDRA, told AFP Thursday that Shell’s failure to maintain that line, or hose, amounted to negligence that could not go unpunished.

“This type of thing cannot be done, anywhere, without a fine,” he said.
Idabor further charged that thousands of people who rely on the ocean for their livelihood have been negatively affected, adding that “health impacts” had been reported.

Shell however dismissed that claim. “Some parties are alleging that oil from the spill impacted communities, the shoreline, rivers and creeks,” Onyejekwe said.

“It was oil from a third party spill that impacted some parts of the shoreline despite SNEPCo’s efforts to tackle it,” he added.

Many delays are expected before the case is resolved and Idabor said he is due to brief President Goodluck Jonathan in the coming days about the landmark penalty.

The Bonga oil field, which has a capacity of 200,000 barrels per day, is located some 120 kilometres (75 miles) off the coast of Nigeria.

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  • What else is new? Let Shell go ahead and challenge the penalty. Our major concern is the suspect leadership the country is saddled with at the moment. Otherwise, where does Shell get off challenging the penalty? Indeed Shell has operated for far too long without any care whatsoever for the environment in the Niger Delta. The UNEP Report is still fresh in our memory.

  • Why go to court let them pay

  • Shell or what ever, should behave itself well and pay the fine! It is just a stipence compel to all they’ve exploited thus far.

  • let them pay the money