Shell Urged to Ensure Safe Decommissioning of Assets Before Nigeria Exit
A recent report on the environmental impact of multinational companies has called on Shell (SHEL.L) to safely dismantle its old infrastructure or bear the cost of removal from the Niger Delta before exiting Nigeria’s oil and gas sector.
Shell’s planned exit from Nigeria’s onshore operations comes after reaching an agreement in January to sell its business to a consortium of five mainly local companies for $2.4 billion. This divestment trend reflects international oil companies’ efforts to disengage from Nigeria’s troubled onshore oil sector.
However, concerns arise over the potential environmental degradation left behind due to the decommissioning of old assets. The Centre for Research on Multinational Corporations (SOMO) highlights this issue in their report, emphasizing the need for responsible dismantling practices.
“The big issue is that Shell is leaving onshore Niger Delta and leaving behind potentially a massive bill for cleanup,” stated Audrey Gaughran, SOMO’s executive director.
Despite requests for comment from Reuters, Shell has not responded regarding their decommissioning plans. In their January announcement, Shell mentioned that the Renaissance consortium, taking over their operations, would handle oil spill management in the delta.
Layi Fatona, vice chairman of ND Western within the consortium, emphasized adherence to legal requirements but did not disclose specific cleanup budget details.
Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission, highlighted the necessity for oil majors to demonstrate compliance with decommissioning regulations before exiting. However, he did not specifically address Shell’s case or confirm regulatory compliance.
Local communities in the delta are also seeking environmental restoration or compensation from Shell for historical oil spill damages, highlighting the ongoing concerns beyond decommissioning.
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“We depend on farming and fishing, but now our lands and rivers have been destroyed. If they leave without healing the soil, how do we survive,” expressed Ayibakuro Warder, a 61-year-old farmer from Ikarama community in Bayelsa state.
While the government has indicated approval of the Shell deal, stakeholders emphasize the importance of ensuring environmental responsibility and community welfare during and after the transition.
