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$1.5 billion battle: Nigeria orders Shell to pay

A Nigerian court on Friday ordered oil giant Shell to pay southern communities $1.5 billion in compensation for environmental pollution and degradation.
Oil workers walk at the Idu Agip flow station near Port Harcourt in Nigeria's volatile but oil-rich Niger Delta
Nigeria's oil-rich Niger Delta is dotted with oil facilities and pipelines like this one near near Port Harcourt. George Esiri / Reuters file
/ Source: news services

A Nigerian court on Friday ordered Royal Dutch Shell PLC to pay southern communities $1.5 billion in compensation for environmental pollution and degradation in the oil-rich Niger Delta.

Justice Okechukwu Okeke of the federal high court in the oil industry center, Port Harcourt, ruled that Shell, in its capacity as the operator of a joint venture, was obliged to pay the sum first ordered by the country’s parliament in August 2004, a court registrar said. The joint venture includes the Nigerian government, France’s Total and Italy’s ENI.

Stuart Bruseth, Shell spokesman in London, said ”we believe that we will have strong grounds to appeal as independent expert advice demonstrates there is no evidence to support the claims,” Bruseth said. “We remain committed to dialogue with the Ijaw people.”

Shell had gone to court to challenge the lawmakers’ decision made in response to a petition by ethnic Ijaws.

The joint venture Shell operates produces a little under half of Nigeria’s 2.5 million barrels daily of oil exports.

The oil wealth has long been a source of tension in southern Nigeria, where communities say they see too little benefit and bear too much burden.

In the latest unrest over the past week, militants have abducted foreign oil workers, blown up pipelines and sabotaged a Shell oil loading platform, forcing the company to shut off the flow of several hundred thousand barrels of oil.

Communities often accuse Shell of allowing its oil to spill into the rivers and swamps of the southern Niger Delta, spoiling crops and driving fish away.

Shell says most spills are caused by saboteurs trying to steal the oil for sale by international criminal syndicates on the world market.

Chief Malla Sasime, traditional ruler of the Ijaw Epie Kingdom in Bayelsa, said Shell should pay up immediately.

“Our people have gone through due process to get the judgment ... They must pay the money or be ready to leave our land,” he told reporters after the hearing.

The payment of $1.5 billion was also one of the demands issued by militants last month during the campaign of sabotage and kidnapping against the oil industry.

The militants made the demand after kidnapping four foreign oil workers in January, but released them after 19 days without Shell making any promises on the payment.