July 8, 2010

Shell appeals N15.4bn oil spill penalty

By Clara Nwachukwu
The Shell Petroleum Development Company, SPDC, has said it is not willing to cough out N15.4 billion as oil spill penalty since the spill in question was caused by the Nigerian troops during the Nigerian civil war.

Hardly has the dust settled on the Federal High Court landmark ruling on Monday, awarding a N15.4 billion damages against Shell for a 1970 oil spill than the Anglo-Dutch oil giant filed an appeal against the judgment.

Accordingly, Shell told Vanguard in a text response, yesterday, that it had “filed an application for a stay of execution and an appeal against the judgment.”

In its appeal, the company noted: “The spill in question occurred during the Nigerian civil war, when troops set up the leak. We were not operating in the area at the time because of the civil war.”

Even as Shell battles against the court ruling, the Anglo-Dutch company announced the discovery of  70,000 barrels per day oil from its Gbaran-Ubie project in the Niger Delta, which it said would provide an important new source of energy for export and domestic markets.

“When fully operational next year, it will be capable of producing one billion standard cubic feet of gas a day (scf/d), equivalent to about a quarter of the gas currently produced for export and domestic use in Nigeria.

“It will also produce as much as 70,000 barrels of oil per day. The project’s gas processing plant is now producing 200 million scf/d from the first two wells out of a planned total of 33,” Shell said in a statement yesterday.

“This project will deliver substantial benefits for the country,” argued Mr Mutiu Sunmonu, Managing Director of SPDC. “It will provide liquefied natural gas and oil for export and gas for electricity generation in Nigeria.”

Ruling, a ray of hope —ERA/FoEN

Meanwhile, Shell’s appeal came even as environment activists described the Federal High Court ruling in Asaba, Delta State, as signalling “a ray of hope for communities in the Niger Delta.”

The Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) in a statement noted that communities in the oil rich Niger Delta had tirelessly demanded justice for their environmental rights that had been violated by oil corporations in the past five decades of oil exploration.

In a statement hailing the ruling, ERA/FoEN said the judgment was a further indication that no matter how long it took, the violation of the rights of the people of the Niger Delta must be accounted for.

“While we acknowledge this welcome token forced on Shell by the court, this sum cannot be said to be adequate in remediating the impacts of Shell’s pollution which the Ejama-Ebubu community has suffered for over four decades.

“The ruling, on our own shores, signals a ray of hope for other Niger Delta communities that have suffered the same fate and have been made to pass through the tiresome legal technicalities that the oil industry always unleashes on poor communities,” said ERA/FoEN Executive Director, Nnimmo Bassey.

Mr Bassey remarked that “It is a shame that Shell allowed the community to go through the harrowing court procedures that has culminated in this judgement,” even as he added that the Shell would likely not going accept the court decision and would explore time_wasting legal processes to deny the people their rights.

Reiterating ERA/FoEN’s position on the need for a comprehensive audit of the Niger Delta, Mr Bassey insisted that “No amount of compensation can eliminate the impact of oil spills on farmlands, rivers and streams or make up for livelihoods lost in Ejama_Ebubu or other impacted communities.”

“The Nigerian government cannot overlook the lessons from the British Petroleum (BP) pay_outs resulting from the Gulf of Mexico spill in the United States. It must compel the oil companies polluting the Niger Delta to do same. Shell can no longer hide its monstrous atrocities on the ecology of the Niger Delta. It must not only pay the compensation, it must also clean up its mess in line with international specifications for such actions,” Mr Bassey insisted.