Shell Faces Safety Calls in Nigeria Exit: Decommissioning Old Assets a Priority

Shell Faces Safety Calls in Nigeria Exit: Decommissioning
look at a Shell abandoned oil well installation in Bayelsa State, Nigeria February 8, 2024. REUTERS/Seun Sanni Purchase Licensing Rights

Shell Faces Safety Calls in Nigeria Exit: Decommissioning Old Assets a Priority

In a recent report addressing the environmental impact of multinational companies in Nigeria, it is emphasized that Shell must safely dismantle its old infrastructure in the Niger Delta or bear the cost of their removal before its exit from the country. The report by the Centre for Research on Multinational Corporations (SOMO) raises concerns about potential environmental degradation resulting from Shell’s departure from Nigeria’s onshore oil and gas operations.

Shell’s decision to sell its onshore business to a consortium of primarily local companies for $2.4 billion has been seen as part of a broader trend of international oil companies divesting from Nigeria’s troubled onshore oil sector. However, the report underscores the need to consider the environmental consequences, especially the potential costs of dismantling old assets.

SOMO’s executive director, Audrey Gaughran, highlighted the significant issue of Shell potentially leaving behind a substantial bill for the cleanup of the onshore Niger Delta. Despite requests for comment, Shell did not respond to Reuters, leaving questions about the company’s stance on the matter unanswered.

Shell’s initial announcement of the deal in January stated that the Renaissance consortium, the acquiring group, would assume responsibility for addressing oil spills in the delta. Shell has long attributed such spills to oil theft and interference with pipelines. However, concerns persist regarding the extent of the cleanup and the financial commitment required.

Layi Fatona, vice chairman of ND Western, one of the companies in the Renaissance consortium, did not provide specific details on cleanup plans but mentioned the group’s commitment to following the country’s legal requirements. Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission, emphasized that oil majors, including Shell, must demonstrate compliance with decommissioning rules and other regulations before receiving consent to exit. The government has approved the Shell deal, but the overall environmental impact and the potential burden on Nigeria remain significant considerations in this ongoing process.


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