Shell faces calls to safely decommission old assets before Nigeria exit
Shell is facing mounting pressure to ensure the safe decommissioning of its aging infrastructure or bear the costs of removal from Nigeria’s Niger Delta region before its anticipated exit. This comes as a report by the Centre for Research on Multinational Corporations (SOMO) highlights concerns regarding the environmental impact of multinational companies’ activities in the area.
According to Audrey Gaughran, the executive director of SOMO, the looming issue revolves around the potential environmental cleanup bill that Shell may leave behind as it prepares to exit the onshore oil and gas operations in Nigeria’s troubled Niger Delta region. Gaughran emphasized, “The big issue is that Shell is leaving onshore Niger delta and leaving behind potentially a massive bill for (clean up).”
Shell recently agreed to sell its Nigerian onshore assets to a consortium of five mostly local companies for $2.4 billion, marking its latest move to divest from the challenging onshore oil sector in the country. Layi Fatona, vice chairman of ND Western, one of the companies in the Renaissance consortium, refrained from commenting directly on the issue but assured that the consortium would adhere to the country’s legal requirements.
Upon announcing the deal in January, Shell stated that the Renaissance consortium would assume responsibility for managing oil spills in the delta. However, concerns persist regarding the extent to which the consortium will be able to address the environmental legacy left by Shell’s operations in the region.
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Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission, stressed the need for oil majors to demonstrate compliance with regulations on decommissioning before exiting operations. He stated, “Oil majors would need to show compliance with rules on decommissioning among others before they are granted consent to exit.”
Meanwhile, communities in the Niger Delta are calling for environmental restoration or compensation from Shell for the damage caused by historical oil spills. Ayibakuro Warder, a 61-year-old farmer from the Ikarama community in Bayelsa state, expressed concerns about the survival of communities dependent on farming and fishing if the environmental damage is left unaddressed.
