Oil
Shell to resume Niger oil spill compensation talks
PORT HARCOURT – Oil company Shell will resume talks next week in London with lawyers representing 15,000 of the poorest people in the world who are claiming millions of pounds’ compensation for oil spills on the Niger delta. But Martyn Day, of Leigh Day law firm which is acting for the communities, said the case could still go to a full high court trial in London in 2014.
The Shell Petroleum Development Company of Nigeria (SPDC) has admitted liability for two spills from a pipeline in the Niger delta in 2008, but the company disputes the quantity of oil that was spilled and the damage that was done to livelihoods and the environment near the coastal village of Bodo in Rivers State. Oil spill experts working for the communities estimate that nearly 500,000 barrels leaked from the company pipeline over several months, Shell claims it was far less.
The legal action, represents the first time Shell or any oil company has faced claims in the U.K. from a community from the developing world for environmental damage. “We have agreed to negotiate over the next two to three weeks. Probably the talks will go on into the autumn when a deal will become more likely,” said Mr. Day.
The legal development came as Netherlands National Contact Point (NCP), which oversees the implementation of OECD guidelines on the human rights and environmental records of multinational companies, broadly backed claims by Amnesty International and Friends of the Earth International that Shell’s repeated assertions that sabotage is responsible for most of the oil spilt in Nigeria is based on flawed investigations which rely on information provided by the company itself. The two organisations offered NCP video evidence of “serious flaws” in the system used by Shell for investigating oil spills.
NCP accepted there were problems in the spill investigation system but criticised Shell. “Shell management should have had a more cautious attitude about the percentage of oil spills caused by the sabotage. The data they are based on is not absolute”, it said.
But FoeI and Amnesty said on Thursday that NCP should have gone much further in its criticism of Shell. “Sabotage is a problem in Nigeria, but Shell exaggerates this issue to avoid criticism for its failure to prevent oil spills”, said Audrey Gaughran of Amnesty International. “The oil companies are liable to pay compensation when spills are found to be their fault but not if the cause is attributed to sabotage — but it is effectively the company that investigates itself. This is clearly a system open to abuse.” Shell replied that oil companies did not devise the investigation system and that they had acted within the Nigerian law. “Any spill is a serious concern, and SPDC staff and contractors are working hard to eliminate operational spills. Unfortunately the high incidence of oil theft and illegal refining in the Niger delta exacerbates the problem and has a devastating impact on the environment. This criminality is the real tragedy of the Niger delta. SPDC regrets that some NGOs continue to take a campaigning approach rather than focusing on on-the-ground solutions that bring societal benefits”, said the Shell spokesman Jonathan French.
Shell’s 2012 sustainability report states that 95% of the 26,500 barrels of oil spilled from Shell facilities in Nigeria which were as a result of sabotage. Of the 173 oil spills over 1.5 barrels from SPDC facilities, the company said 80% were caused by illegal activity.
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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