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Oil Spills: Why Only Shell and ENI?

From John Meze, Lagos

OPERATIONS of two international oil and gas majors, Shell and ENI, operating through their subsidiaries Shell Petroleum Development Company (SPDC) and Shell Nigeria Exploration and Production Company (SNEPCo), a sister company of SPDC from Netherlands, as well as Nigeria Agip Oil Company (NAOC) from Italy, in Nigeria, for over 30 years, have been subjects of criticisms and condemnations.

Operations of both companies in Nigeria, for over the 30 years, have never left the purview of the operators of the industry, who are in competition and the industry watchers, who are on the look out for the employment of best practices by the operators in the industry.

The two companies have allegations of corruption and pollution of the environments where they operate in the country trailing them and these cases have been subsisting in the courts, while new ones are brought to the fore.

There are also,  alligations of both companies refusing to carry out remediation exercises where they may have allegedly spilled crude oil, as well as failures compensate impacted communities as allegedly directed by courts in Nigeria, Italy, Netherlands and the United States of America(USA).

However, Shell, though the only oil and gas company in the country with the highest number of oil field, being the first to commence exploration and production in Nigeria, is known to have executed the most corporate social responsibility programme and projects in their host communities.

Shell Companies in Nigeria (SCiN), in the past five years, has expended over $500 billion on corporate social responsibility (CSR) works in the form of supporting education, small business, agriculture, training, healthcare, and capacity building.

It is known to have trained over 6,000 Nigerians, 15,000 benefited from its scholarship programme, built about 30 health facilities, and about 30 percent of Nigeria’ s current grid connection to electricity.

The companies account for an average of about 700,000 barrels of oil equivalent per day coming for 535,000 barrels per day of SPDC joint venture and about 165,000 barrels per day from SNECO ventures.

This was seen as a drop from an overall production of about 949,000 barrels per day in 2012 due to the activities of vandals, militancy and deferments.

The company states that, ”SCiN portfolio in Nigeria continues to evolve and changes are designed to enable the Shell group of companies to remain a competitive player in Nigeria for years to come.

Nigeria is core part of the Shell group’s upstream business today and of its growth objectives in integrated gas and deep water.

At other areas of its involvement such as the Nigeria Liquefied Natural Gas Company (NLNG), it controls 25.6 percent equity whereas the NNPC controls 49 percent, Total 15 percent and Nigeria Agip Oil Company’s (NAOC) upstream arm known as ENI has 10.4 percent.

And at other joint ventures with the NNPC, Total and ENI, it controls 30 percent while others hold 55 percent, 10 percent and Five percent, respectively.

However, a recent allegation states that, Amnesty International has accused ENI and Shell of negligence when addressing crude spills in Nigeria and described the firms’ actions as “serious negligence”.

The watch dog said that the companies were “taking weeks to respond to reports of spills and publishing misleading information about the cause and severity of spills, which may result in communities not receiving compensation.”

In reply, a Shell spokesman informed that, Amnesty’s allegations “are false, without merit and fail to recognise the complex environment in which the company operates.”

In a related development in 2015, Nine Ilaje communities in Ondo State alleged that the company refused to compensate them for an oil spill from their deep oil field Bonga field which affected their aquatic lifes, fuana and even led to the loss of human lives.

Speaking to DAILY ASSET on this issue, Prince Taiwo Aiyedetiwa, the Secretary of the nine communities unified on this course, informed that several efforts by the communities to get the company to do the needful met brick walls, since no replies were given to their numerous requests for compensations.

He averred that, after further efforts, which involved the Federal Government, the people resolved to take the case to court where they expected to get a favourable verdict.

He also informed that on an another hand the communities have unsettled issues with NAOC with regards to some spills, right of the way and some others, which may lead them to court.

But reacting to the allegation, the spokes person of Shell stated that the communities are economical with the truth, since the company’s investigations have revealed that they were not impacted, and they have been told so.

In a related development, the Movement for the Survival of the Ogoni People (MOSOP) is opposing the resumption of oil exploration and production in the community.

“The MOSOP Coordinators chairman (Frank Jonah) urged the government to show some sense of humanity by addressing the issues of self determination for the Ogoni people before contemplating any form of negotiations regarding the Ogoni oil.

“He (Jonah) noted that failing to address these issues will mean the government has chosen to kill and repress the people to forcefully exploit their oil resources as there must be very strong resistance against such moves.

”Before this time, the MOSOP Kingdom Coordinators urged the government to first address the fundamental demands of the Ogoni people, including the right to recognition and self determination through the creation of a Bori state, the clean-up of Ogoniland and the payment of compensation to Ogoni people whose means of livelihood had been allegedly damaged by years of environmental degradation by Shell’s presence in the area,” Jonah’s spokesperson, Letom Sinen, said in a statement from the group earlier in the year.

Johan said Nigeria must show its commitment to justice and fairness especially in the Ogoni issue.

They kicked against the resumption of Shell’s operations in area by stating that, “We have no electricity, water and many more basic amenities, despite being a major contributor to the Nigerian economy, and so the government will be most insensitive to ignore all these issues, and to be talking about any form of resuming oil activities in Ogoni.”

MOSOP is currently the umbrella organisation of 11 member groups representing more than 700 000 indigenous Ogoni in campaigning for social, economic and environmental justice in the Niger Delta of Nigeria.

These allegations and the cases are becoming like the never ending story, which are told to children of school years.

Another recent instance is that, both companies are involed in an accusation of an alleged corruption involved in the acquisition of Oil Prospecting Lease 245 (OPL 245), which they have both voluntarily filed international investigations to US authorities discussing how they acquired their stakes in Nigeria’s OPL 245.

It is held that filings in the US are seen as a way for the companies to preempt questions from US officials.

They were supposed to be in court this month in Milan, but Italian prosecutors delayed the trial until May 2018.

They are denying any wrongdoing, and are saying that their total $1.3 billion in payments for the block were transparent, legal and went directly into an escrow account controlled by the Federal Government.

ENI, on its own, is yet to free itself from the Koko, in Delta State toxic waste disposal, which, in the early 1990s, drew the attention of the world to the operations company in the country.

Shell and ENI list of alleged malfeasance in exploration and production of crude oil and gas in Nigeria may be seen as being as old as their operations in the country.

Be that as it may, it is held by some industry watchers that in some cases the companies are culpable, while in the most the accusations are spurous because some of these host communities have developed the knack of making endless requests, demands and accusations in order to put them in bad light and fleece them.

This, they argued, is based on the fact that they believe that these oil and gas companies make a lot of money from oil and gas and there exists the need for them to share the oil money.

But one question that remains unanswered, if it is so, why only Shell and ENI from amongst the thousands of oil and gas companies that are operating in the country?

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