A plan by Shell to sell off a Nigerian subsidiary has to be approved by the government in Abuja. The energy multinational says it wants to restructure. Activists see a bid to avoid paying up for decades of pollution.
The company this week said it wants to sell off its onshore Nigerian subsidiary, the Shell Petroleum Development Company (SPDC) in a deal worth $2.4 billion (€2.2 billion). It named the buyers as Renaissance, a consortium comprised of four Nigeria-based exploration and production companies and an international energy group.
The deal is still subject to Nigerian government approval.
Shell said it would not completely exit Nigeria.
“This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions,” Zoe Yujnovich, Shell’s Integrated Gas and Upstream director said in a statement.
How activists regard Shell’s onshore exit
Nigeria is Africa’s biggest oil producer and churns out nearly 1 million barrels of crude per day.
Some local activists told DW that they regard Shell’s onshore divestment plan as a bid to avoid taking responsibility for damage and pollution in Nigeria.
“They are running away from the atrocities and also the damages they have caused the people and the environment and are trying to run away from it in a way of evading to pay a compensation or evading justice from the community,” said Kentebe Ebiarado of Environmental Rights Action, a national environmental and human rights advocacy NGO.
Other multinational companies with operations in Nigeria are divesting for similar reasons, Ebiarado added.
Shell pioneered Nigeria’s oil and gas business in the 1930s. Oil spills,which the company blames on many factors including theft, sabotage, and operational issues, have occurred ever since.
Oil spills have led to several high-profile lawsuits in which Nigerian communities have fought Shell for compensation. In 2021, a Dutch court ruled that Shell had polluted the southern Niger Delta region and ordered it to pay compensation of $111 million for oil spills in 1970.
‘A legacy of pollution problems’
Niger Delta has faced decades of damaging spillages from Shell’s oil operations. In 2005, a pipeline leak caused extensive damage to farmland.
“Even though we plant, the oil inside will surely kill the crops that we plant,” Chief Ernest Oginaba, a Niger Delta farmer, told DW at the time. “So we feel very bad. All these places are condemned, nobody can use it again.”
Bemene Tanem, a resident of Ogoniland in the west of the Niger Delta, told DW that Shell’s exit plan was irrelevant to the community.
“Divestment or no divestment, selling of assets or not selling of assets is none of my business. The issue is Shell has a question to answer to the people of Niger Delta,” Tanem said. “Shell has the responsibility to restore back our land. Our farmlands have been damaged for over 56 years. Shell has damaged our environment. We are living in abject poverty in the mist of plenty.”
Chima Williams, an environmental lawyer based in Nigeria’s Edo state, told DW that Shell’s divestiture was within its rights as a business operating in Nigeria but questioned its failure to consult communities affected by pollution.
“In this instance, they are not divesting of their entire portfolio of facilities in the country,” Williams said. “They are divesting onshore and continue the damage offshore, where they believe or think that Nigerians lack the capacity to monitor their activities and bring them to book.”
A ‘wake-up call’ for the government
Last year a report by Nigeria’s Bayelsa State Oil and Environmental Commission said Shell and Eni must pay at least $12 billion for the cleanup of oil spills in Bayelsa state.
According to Shell, Renaissance will be expected to take over responsibility for dealing with issues related to oil spills, theft and sabotage.
But Williams, who has been instrumental in instituting court proceedings against Shell in London courts on behalf of communities in the Niger Delta is not convinced the new owners will address public concerns.
Nigerians, he said, must put pressure on the government to reject the Shell deal as they have in the case of US multinational ExxonMobil Corporation over its plan to sell off four oil fields in the Niger Delta.
“The ExxonMobil divestment couldn’t happen because [activists], led the media, civil society groups [and] communities to raise the alarm on the real reason why these divestments are happening,” Williams told DW.
Bemene Tanem, the Ogoniland resident agrees, “Upon the billions and billions of dollars Shell is making out of Niger Delta on a daily basis, there is nothing to show for it in the Niger Delta communities.”
Kentebe Ebiarado of Environmental Rights Action believes that the only reasonable deal for Shell to engage in now is compensation.
“This is a wake-up call for the Nigerian government and also the National Assembly to quickly look into the policies that need to be put in place for companies divesting,” he said.
Edited by: Benita van Eyssen