Shell leaving Nigeria on a dirty note as oil spill hits
A pipeline owned by Shell’s subsidiary in Nigeria has spilt crude oil in the Niger Delta after a leak, the country’s spills agency and an environmental group said on Saturday.
The Obolo-Ogale pipeline in southern Rivers State feeds the 180,000 barrel-per-day Trans Niger line, one of two conduits to export Bonny Light crude. It had restarted operations in January after being shut for maintenance in December.
The spill was detected on Friday by local communities, who reported it to Shell Petroleum Development Company of Nigeria (SPDC) and the Nigerian Oil Spill Detection and Response Agency. SPDC did not immediately respond to a request for comment. The agency will visit the site on Sunday, said Ime Ekanem, the agency’s head in Rivers State.
Shell has over the years faced several legal battles over oil spills in the Niger Delta, a region blighted by pollution, conflict and corruption related to the oil and gas industry.
The company last week announced it is set to conclude operations in Nigerian onshore oil and gas after agreeing to sell SPDC to Renaissance, a consortium of five mostly local companies, for up to $2.4bn.
The British energy giant pioneered Nigeria’s oil and gas business beginning in the 1930s. It has struggled for years with hundreds of onshore oil spills as a result of theft, sabotage and operational issues that led to high-profile lawsuits.
Since 2021, Shell has sought to sell its Nigerian oil and gas business but will remain active in Nigeria’s more lucrative and less problematic offshore sector.
Shell’s exit is part of a broader retreat by Western energy companies from Nigeria as they focus on newer, more profitable operations. ExxonMobil, Italy’s Eni and Norway’s Equinor have struck deals to sell assets in the country in recent years.
The British major will sell SPDC for a consideration of $1.3bn, it said, while the buyers will make an additional payment of up to $1.1bn relating to prior receivables at completion.
The Renaissance consortium is made up of Swiss-based trading and investment company Petrolin and local oil exploration and production companies ND Western, Aradel Energy, First E&P and Waltersmith. It will take over the responsibility for dealing with spills, theft and sabotage, Shell said.
“This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our deepwater and integrated gas positions,” Shell head of upstream Zoë Yujnovich said.
SPDC has a 30% stake in the joint venture that holds 18 onshore and shallow water mining leases. Shell’s resources in SPDC reached about 458million barrels of oil equivalent by the end of 2022. Other partners in the joint venture are the Nigerian National Petroleum Corporation, which holds 55%, TotalEnergies with 10%, and Eni with 5%.