Civil society groups, led by Amnesty International, are calling on the Nigerian government to block Shell Plc’s proposed sale of its onshore oil business in Nigeria.
The $1.3 billion deal, agreed upon in January 2024 with Nigerian-owned Renaissance Africa Energy, aims to fulfill Shell’s long-term goal of exiting operations in the challenging Niger Delta. However, the groups argue that the sale should not proceed until adequate safeguards for human rights are ensured.
In a report published on Monday, 40 groups, including Amnesty International, outlined several conditions that must be met before the sale can be approved. These conditions included: an assessment of environmental pollution around the assets, a guarantee of funds for clean-up efforts, and consultation with local communities. The groups emphasized the importance of protecting human rights and the environment amidst such transactions.
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What they said
Isa Sanusi, Amnesty International’s Nigeria Director, stated:
- “There is now a substantial risk Shell will walk away with billions of dollars from the sale of this business, leaving those already harmed without remedy and facing continued abuse and harms to their health. Guarantees and financial safeguards must be in place to immediately remedy existing contamination and to protect people from future harms before this sale should be allowed to proceed. Shell must not be permitted to slip away from its responsibilities for cleaning up and remedying its widespread legacy of pollution in the area.”
- According to Amnesty international, the deal “appears to fall far short of several regulatory and legal requirements. These include the apparent lack of an environmental study to assess clean-up requirements, and an evaluation to ensure sufficient funds are set aside for potential decommissioning of oil infrastructure – a sum that is likely to amount to several billions of US dollars. It also noted the lack of an inventory of the physical assets being sold, which is a red flag potentially indicative of the state of disrepair of pipelines and infrastructure from which many leaks have emanated.”
Leaks often result in severe consequences for the health and well-being of local communities. Every individual deserves access to a clean, healthy, and sustainable environment, they said .
What you should know
The delay in regulatory approval for this deal reflects broader challenges in the Nigerian oil sector. Other major players, including Exxon Mobil Corp., Eni SpA, and Equinor ASA, are also awaiting approval for similar asset sales. Despite initial optimism surrounding President Bola Tinubu’s election in 2023, progress in the sector has been slow, with several deals on hold.
The Renaissance consortium, which includes ND Western Limited, Aradel Holdings Plc, First Exploration and Petroleum Development Company Limited, the Waltersmith Group, and the Petrolin Group, stands ready to acquire Shell’s assets. However, the fate of the deal hinges on the Nigerian government’s response to the calls for enhanced safeguards and regulatory approval.
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Backstory
Nairametrics previously reported that oil workers, represented by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), opposed the proposed sale of Shell’s onshore assets. They emphasized their lack of recognition for the purported group set to acquire these assets.
Shell initially disclosed its plan to divest its Nigerian onshore assets in 2021 due to challenges like theft and oil spills, which conflicted with its long-term energy transition strategy. Former CEO Ben van Beurden pointed out a surge in sabotage, leading to a state of near-lawlessness beyond the company’s control.
Interest in Shell’s stake emerged from local producers like ND Western, Heirs Oil and Gas Ltd., Seplat Energy Plc, and Sahara Group Ltd. However, the divestment process faced a setback in 2022. It resumed in June 2023, focusing on selling Shell’s 30% interest in the joint venture SPDC, which operates onshore and in shallow-water oil and gas fields.
The pause in the divestment process was triggered by a lawsuit in Nigeria’s Supreme Court. A lower court instructed Shell to halt asset sales until it resolved a dispute with a Niger Delta community concerning alleged pollution.
