Oil Spills Hit 14m Litres as Shell’s N800b Judgment Upsets Industry

As International Oil Companies (IOCs) are planning to divest from Nigeria, concerns are beginning to mount over growing cases of oil spillage in the Niger Delta region and the N800 billion court judgment between Shell Nigeria and some communities in the region.

In less than three years, weak infrastructure, especially pipelines, according to stakeholders, has led to the spillage of 14 million litres of crude oil, worth N2.8 billion coupled with cascading environmental dangers and health burden, leading to increase in cases of infant mortality and cancers.

In fact, fresh intrigues are beginning to emerge ahead January, when the court would decide the fate of Shell Nigeria in an N800 billion damages earlier awarded by the Federal High Court in Owerri for the 2019 spillage in Eleme communities of River State.

The jury is nearly out in the biggest dispute award ever in Nigeria’s volatile oil industry. But whether Shell Petroleum Development Company (SPDC) Limited, along with its two parent companies in the United Kingdom and The Hague, Netherlands, can come clean of culpability in a historic dispute debt awarded against it in a spill that occurred on swamp farmlands in Egbalor, Ebubu in Eleme Local Government Area of Rivers State, is what industry watchers are waiting to see next month.

Shell, using all its legal resources, is seeking to convince the judge at the Court of Appeal to obviate payment of damages to some 88 persons, who got judgment in November 2020 from a Federal High Court in Owerri over spillage on their fishing facilities in Ejalawa community, Oken-Ogogu swamp farmlands.

The judge of the Federal High Court, Owerri, Imo State, T.G. Ringim, had in the judgment last year, held that Shell Nigeria, Shell International Exploration and Production BV (SIE&P) and the Nigerian National Petroleum Corporation (NNPC) were liable for the spill.

Isaac Torchi and 87 members of the Ejalawa community had gone to court against SPDC, SIE&P BV and NNPC over oil spillage in January 2020, which they claimed destroyed their environment and their sources of livelihood – mainly fishing and agriculture.

Earlier in August this year, the Anglo-Dutch oil giant finally agreed to pay N45.7 billion to the Ejama-Ebubu community, after 31 years of legal tussle. The court has fixed January 25, 2022 to hear the oil company’s application.

The appellate court would also on that date hear all other pending applications, including that of the plaintiffs/respondents, seeking an order of court directing Shell to deposit the said judgment sum with the court as condition for hearing the application for stay, as well as another case seeking to set aside the notice of appeal filed by Shell on the grounds it is incompetent and an abuse of court process.

MOST stakeholders are insisting that oil companies must be forced to remedy years of environmental degradation as they are already divesting their assets from the country, otherwise indigenous firms planning to take over the assets or the Federal Government would be faced with clearing the Augean stable.

Though not the only country producing crude oil or the highest producer, Nigeria is regarded as the highest oil spilling nation, with Shell Nigeria, according to data from the National Oil Spill Detection and Response Agency (NOSDRA), leading other companies to deface the environment with an average of 400,000 barrels of crude oil daily.

NOSDRA survey showed that Nigerian National Petroleum Corporation (NNPC) and Shell Nigeria led other oil companies to spill nothing less N2.8 billion worth of the nation’s crude in about three years.

The concern for most environmental rights activists, legal experts and other industry stakeholders is that the growing cases of oil spill and court cases emanating from them pose fresh test as the N800 billion landmark judgment, regarded as the highest fine ever in the history of the country, may reshape the nation’s oil industry.

Industry stakeholders are also pointing accusing fingers at the integrity of oil infrastructure in the country, insisting that it was high time for the judiciary, as well as oil regulators, to make operators pay the price of negligence.

Despite the presence of NOSDRA and the defunct Department of Petroleum Resources (DPR) now Nigerian Upstream Regulatory Commission (NURC), about 21,291 barrels of the nation’s crude oil was spilled in 2020, 42,076 barrels in 2019 and 25,308 barrels in 2018, combining with gas flaring to worsen environmental issues for oil producing communities.

In 2020 alone, NOSDRA said there were 370 publicly available oil spill records attributed to 24 companies, prominent among the companies was Shell Petroleum Development Corporation (SPDC), which had 186 spills, amounting to 13,280 barrels.

Recall that earlier this year, a Federal High Court sitting in Abuja ordered Shell to pay the sum of N45.9 billion to the Ejama-Ebubu people in compensation, ending a legal case that began in 1991. The court equally this year ordered Mobil Producing Nigeria Unlimited and the NNPC to pay the sum of N81.9 billion as cumulative damages to oil communities in Ibeno Local Government Area of Akwa Ibom State.

The Supreme Court had also late last year objected to setting aside the judgment that ordered Shell to pay N17 billion to some Ogoni communities in Rivers State who were affected by oil spillage that occurred in 1970, even as a UK Supreme Court earlier this year ruled that oil-polluted Nigerian communities could sue Shell in British courts.

Currently divesting about $2.3 billion worth of assets in Nigeria, communities in Eleme had dragged Shell to court for a September 18, 2019 oil spillage, wining an historic N800 billion damages in a ruling delivered late November at the high court in Owerri.

While Shell has appealed the case with hearing due in January, renowned environmental activist and Executive Director of Health of Mother Earth Foundation, Nnimmo Bassey, noted that multiple wins by victims of Shell’s ecological infractions and denial of the rights of the people point to the fact that justice would always come if people are resolute and refuse to be cajoled out of standing for their rights.

Bassey said: “It is also an indicator to corporations whose activities are inherently destructive to know that it makes economic sense to exercise utmost duty of care when carrying out their activities. The inclination to think that because they are in joint partnerships with government, they can ignore the right to life of the people is ultimately injurious to their business.”

According to him, the era of ignoring or hiding oil spills is over, adding that the Niger Delta has a complex ecosystem that is interconnected by creeks, rivers, swamps, all emptying into the ocean.

Bassey also noted that oil companies cannot spill and ruin the environment and then use security operatives to block the people from observing what is happening and demand a thorough clean up of their mess.

Condemning the Nembe spill, Bassey said it was time for the Nigerian government to show the level of seriousness needed in situations like this and called for an assessment of the entire Niger Delta environment as well as a health audit in the entire region.

Leader of the Alliance for the Defence of Eleme, Johnson Emere Mba-Ngei, told The Guardian that failure of oil infrastructure was hurting the people and environment of the oil producing region, stressing that unless the system makes oil operators pay for their negligence, the situation may persist.

He raised concerns over the growing environmental issues in the region stressing that farming, fishing and the health of the people are already compromised by degradation.

Managing Partner, The Chancery Associates, Emeka Okwuosa, who said the situation remained pathetic, noted that ongoing court convictions were the right direction. “We have the right laws but our problem has always been implementation and enforcement,” he said.

While noting that oil spillages and environmental degradation have been the bane in the industry, Okwousa said not only does the situation result in health problems, but also loss of livelihood and death.

“I hope the Federal Government and all other government agencies and the courts are not found wanting in the implementation and enforcement of the judgments.”

Energy expert at PWC, Habeeb Jaiyeola, said the impacts of the spills in the region outweighs the judgment and fines by the court, adding that the after effect of the situation may hurt the communities for generations.

With Nigeria leading the rest of the world with an average daily oil spill of 4,000 barrels, Jaiyeola said: “Our focus should be on how to prevent oil spills from occurring, rather than leveraging success from court cases. We should not allow oil spills to happen at all.

“Oil spills have extensive impact on the people that live close to oil pipelines or where the crude oil extraction operations are being done. The impact goes beyond the health of those living around the area. It also impacts on agriculture. The content of this oil spill might also even exist within the crops that are eventually harvested, which then also has negative impact when they are consumed.”

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