Shell should not be allowed to divest from the Niger delta until it takes responsibility for cleaning up its toxic legacy of pollution and the safe decommissioning of abandoned oil infrastructure, a report says.
A recent report titled “Selling Out Nigeria, Shells Irresponsible Divestment” by the Centre for Research on Multinational Corporations (Somo) highlights the urgent need for Shell to clean up the pollution it has caused, despite the substantial profits it has reaped from the region’s oil resources.
The report emphasizes the importance of Shell’s responsibility in safely decommissioning its abandoned oil infrastructure to mitigate its toxic environmental legacy.
Recommended reading: Shell to Sell Nigeria Onshore Oil Business for $1.3 Billion
No evidence of Shell’s proposed clean up
The report highlights a significant lack of clarity regarding the financing for decommissioning activities. Although Nigerian law mandates that corporations allocate finances for decommissioning, it’s unclear how much—if any—money has been reserved for this purpose, according to the report.
Somo’s investigation team was unable to obtain any evidence confirming that Shell has established a reserve or reserves to finance the decommissioning of the oil mining leases it has divested.
Audrey Guaghram, Executive Director of SOMO said,
- “Shell cannot be allowed to divest from the onshore oil industry in the Niger Delta before it takes responsibility for its toxic legacy of pollution and the safe decommissioning of abandoned oil infrastructure.”
- “The oil giant is leaving behind petroleum-contaminated rivers and streams and large areas of polluted land that have devastated the lives and livelihoods of millions of people living in the Niger Delta.”
- “Shell has pulled off the ultimate Houdini act. As the oil industry enters its final phase, whether that’s in the next 5 years or 25, Shell has sold its toxic assets and will not be left holding them when the music stops. Shell has profited from oil extraction for decades and in doing so, has made the Niger Delta one of the most oil-polluted places on earth, leaving communities to face the dire consequences that will remain well beyond the lifetime of the industry”
Shell’s case
Shell consistently asserts that oil theft and tampering with pipelines are the primary causes of oil spills. However, the report emphasizes that these factors do not absolve Shell of its cleanup obligations. “Under Nigerian law, Shell must clean up oil spills no matter the cause. It has failed to do so”- the report says.
Backstory
Last month, Shell announced an agreement with Renaissance Consortium to sell its onshore business for a total of $2.4 billion- effectively signalling divestment from Nigeria’s onshore fields.
The move comes after Nigeria’s supreme court granted Shell’s appeal to a hearing in an oil spill case that blocked the company’s planned divestment from onshore oil production.
Like other IOCs operating in the Niger Delta, Shell is seeking to end onshore operations and move towards deep water fields.
The proposed sale of its onshore field is subject to approval from the regulatory authority- the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).
The company’s proposed divestment from the Niger Delta’s onshore fields have been met with staking criticism from civil society groups who called on the federal government to halt the process.
Shell has had an almost six-decade presence in the Niger Delta characterized by series of controversies, litigation and conflicts with host communities bothering on pollution, community rights etc.
The company currently has series of court cases with individuals and communities from the Niger Delta bothering on oil spill and compensation thereof.
