A former Shell’s Legal Adviser, Madaki Ameh, yesterday weighed in on the proposed assets sale by the international oil company (IOC), urging prospective buyers to beware of some alleged toxic facilities being put up for sale.
In a statement he titled: “Sale of Shell’s Onshore and Shallow Offshore Assets: Buyers Beware,” the ex-top Shell official explained that the company currently has several liabilities, including the N800billion judgment against it.
But one of Shell’s operating entities in Nigeria, Shell Petroleum Development Company (SPDC) had recently told the Court of Appeal, Owerri Division, Imo state, to upturn the judgment against the oil giant by a Federal High Court in the state in 2020.
SPDC is appealing against the judgment, denying the occurrence of spills on the alleged dates of the incidents before the court.
SPDC argues that the court was duty bound to hear evidence to determine first if the spill occurred and the alleged cause(s) before proceeding to fix liability and compensation, which it noted didn’t happen in the case.
Shell has been selling onshore and shallow water fields to Nigerian independent producers for more than a decade and is trying to find a buyer for the rest of the assets so it can focus on deep-water projects.
At least five Nigerian oil and gas companies have submitted bids for the onshore oilfields in a sale that could fetch up to $3 billion, ThisDay recently reported.
The company, which recently deleted “Anglo Dutch” from its name, to simply be identified as Shell, has stakes in about 19 oil mining leases in Nigeria’s onshore oil and gas joint venture and if the judgment is upheld, it could significantly impact its efforts to sell its remaining licenses.
The affected community, in Rivers state, has said that it will ask the appeals court to prevent the company from disposing of the permits while the award remains unpaid.
But the former Shell lawyer and Managing Counsel, Legislative Development with SPDC, cautioned prospective investors and bidders for the onshore and shallow offshore assets belonging to the SPDC/NNPC joint venture currently on offer by the Shell Group, insisting that “they may be acquiring toxic liabilities rather than assets.”
Ameh, an oil and gas expert, environmental lawyer and Managing Partner, BBH Consulting, said that judging from the huge contingent liability on Shell and its parent companies, Shell International Limited and Shell BV from the N800 billion (about $2 billion), judgment awarded against it, it would be a dead end for any company which decides to buy the assets without thorough due diligence.
He recalled that given the special and general damages for what he described as the massive oil spill from its facilities in the community in January 2020, any hasty investment decision taken towards acquisition of any joint venture assets owned by SPDC at this time would be grossly counterproductive.
Apart from the real risk of stepping into the shoes of Shell as judgment debtors, Ameh maintained that the technical integrity of those assets are questionable, especially if the recent experience of Aiteo from the oil spill from its Nembe facility acquired from Shell, is anything to go by.
Ameh, who at different times was also head, land acquisition and claims and head, security planning and strategy with the company before reportedly opting for voluntary early retirement in 2008 to pursue other interests, stated that the company’s practices in Nigeria, markedly differs from how it treats its hosts elsewhere.
He expressed shock that the environmental practices of Shell in Nigeria are completely out of tune with the company’s practices in other parts of the globe where the company operates.
The lawyer called on the board of Shell International to live up to its global posture as a fair operator and prevail on SPDC, its Nigerian subsidiary, to do justice to the impacted community.
This, he stated, the IOC can do by meeting its obligations to the people, “instead of playing the ostrich through high-handed processes designed to short-change and further impoverish the people of the Niger Delta.”
He also called on the industry regulators in Nigeria to ensure the highest level of operational efficiency by multinational oil and gas companies operating in Nigeria, so that the much touted “Nigerian factor” does not further jeopardize the collective interest of host communities.
If this is allowed, Ameh argued that it will not only affect the communities but also short-change the entire Nigeria, especially in a post Petroleum Industry Act (PIA) era.
Justice Tijani Ringim of the Federal High Court, Owerri, Imo State, had in the judgment delivered on November 27, 2020, held that SPDC, Shell International Exploration and Production BV (SIE&P) and the NNPC were liable for oil spillage from their facility in Enugu/ Eleme local government.
One Isaac Torchi and 87 members of the community had dragged SPDC, SIE&P BV and NNPC to court over the oil spillage which they claimed damaged their environment as well as source of livelihood.
Other defendants are Shell International Company Limited and the Attorney General of the Federation (AGF).
The plaintiffs had in the suit dated January 16, 2020 asked the court to determine whether by the combined provisions of the 1999 Constitution, Oil Pipeline Act, African charter on Human and Peoples Rights, Oil and Gas Pipeline Regulations, they were entitled to compensation from the defendants.
The community claimed that there had been a continuous injury of hydrocarbon oil spillage, rain acid pollution, non-maintenance of ruptured pipes, causing deaths of plaintiffs’ children.
Also impacted by the spill, according to the plaintiffs were farmers, their trees, drinking water, thereby causing irreparable damage to their farm products, fish ponds, fish nets and machines worth several billions of naira.
They also sought another order directing Shell to depollute and rehabilitate the destroyed farmland, ponds and agricultural products, as well as a 10 per cent post-judgment interest from the date of the judgment and litigation cost of N1 billion.
Delivering judgment, Ringim had held that there was evidence of rupture at the defendants Akuka/Ebubu flow line named Aka-Ebu-Onu-Ban 55 situated on the plaintiffs’ land.
Emmanuel Addeh
ThisDay
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