Shell Nigeria

Shell Nigeria is the common name for Royal Dutch Shell's Nigerian operations carried out through four subsidiaries—primarily Shell Petroleum Development Company of Nigeria Limited (SPDC). Royal Dutch Shell's joint ventures account for more than 21% of Nigeria's total petroleum production (629,000 barrels per day (100,000 m3/d) (bpd) in 2009)[1] from more than eighty fields.

History

Shell started business in Nigeria in 1937 as Shell D’Arcy and was granted an exploration license. In 1956, Shell Nigeria discovered the first commercial oil field at Oloibiri in the Niger Delta and started oil exports in 1958.[2] Prior to the discovery of oil, Nigeria like many other African countries strongly relied on agricultural exports to other countries to supply their economy. Many Nigerians thought the developers were looking for palm oil.[3]

Recent news

In July 2013, Shell Nigeria awarded Kaztec engineering Limited a $84.5 million exploration and production contract for the Trans-Niger oil pipeline.[4]

On March 25, 2014, Shell Nigeria declared a force majeure on crude oil exports from its Forcados crude oil depot which stopped operations due to a leak in its underwater pipeline, a clause freeing the company from contractual obligations as a circumstance beyond its control happened.[5] While it struggled repairing the pipeline, Royal Dutch Shell announced a force majeure on Nigerian crude oil exports.[6] Uzere was the second place were oil was discovered. And Olomoro was the third place, before oil discovery spread across most places in the Niger Delta region.

Structure

Shell Petroleum Development Company

Shell Petroleum Development Company (SPDC) is the largest fossil fuel company in Nigeria, which operates over 6,000 kilometres (3,700 mi) of pipelines and flowlines, 87 flowstations, 8 natural gas plants and more than 1,000 producing wells. SPDC's role in the Shell Nigeria family is typically confined to the physical production and extraction of petroleum. It is an operator of the joint venture, which composed of Nigerian National Petroleum Corporation (55%), Shell (30%), Total S.A. (10%) and Eni (5%). Until relatively recently. It operated largely onshore on dry land or in the mangrove swamp.

Shell Nigeria Exploration and Production Company

Shell Nigeria Exploration and Production Company (SNEPCO) was established in 1993. It operates two offshore licenses, including for the Bonga Field.

Shell Nigeria Gas

Shell Nigeria Gas (SNG) was established in 1998 for Shell Nigeria natural gas activities and natural gas transmission system operation.

Shell Nigeria Oil Products

Shell Nigeria Oil Products (SNOP) was incorporated in 2000 for developing the market for Shell branded products and services, such as fuels, chemicals and lubricants.

Nigeria Liquified Natural Gas

Main article: Nigeria LNG

Nigeria LNG (NLNG) is a joint venture for liquefied natural gas production. Shell has a share of 25.6% in this company and is also its technical adviser. Other partners are Nigerian National Petroleum Corporation (49%), Total (15%) and Eni (10.4%).

Impact

In the 1990s tensions arose between the native Ogoni people of the Niger Delta and Shell. The concerns of the locals were that very little of the money earned from oil on their land was getting to the people who live there, and the environmental damages caused by the recurring sabotage of pipelines operated by Shell.[7] In 1993 the Movement for the Survival of the Ogoni People (MOSOP) organized large protests against Shell and the government, often occupying the company production facilities. Shell withdrew its operations from the Ogoni areas. The Nigerian government raided their villages and arrested some of the protest leaders. Some of these arrested protesters, Ken Saro-Wiwa being the most prominent, were later executed, against widespread international opposition from the Commonwealth of Nations and human rights organisations.[8]

The ethnic unrest and conflicts of the late 1990s (such as those between the Ijaw, Urhobo and Itsekiri), coupled with a peak in the availability of small arms and other weapons, led increasingly to the militarization of the Delta. By this time, local and state officials had offered financial support to those paramilitary groups they believed would attempt to enforce their own political agenda. Conflagrations have been concentrated primarily in Delta and Rivers States.[8]

Shell maintained that it asked the Nigerian government for clemency towards those found guilty but its request was declined. A 2001 Greenpeace report mentioned two witnesses for whom the company and the Nigerian military "bribed" by promising money and jobs at the facility. Shell gave money to the military and was blamed for contaminating the Niger Delta with oil.[9] The company denied these claims and inferred that MOSOP was an extortionary movement that advocated violence and secession.[10]

In December 2003, Shell Nigeria acknowledged that the conflict in the Niger Delta makes it difficult to operate safely and with integrity and that "we sometimes feed conflict by the way we award contracts, gain access to land, and deal with community representatives",[11] and that it intends to improve on its practices.[12] In 2009, Shell offered to settle the Ken Saro-Wiwa case with US$15.5 million while denying any wrongdoings and calling the settlement a humanitarian gesture. According to the New York Times and the journalist Michael D. Goldhaber the settlement came days before the start of a trial in New York that was expected to reveal extensive details of Shell's and MOSOP's activities in the Niger Delta.[10][13]

Oil spills

Individuals from villages surrounding oil production facilities occasionally drill holes into Shell Oil pipelines for the purposes of capturing oil and transporting it illegally out of Nigeria for monetary gain. This process, known as "oil bunkering", is estimated to cost Nigeria as much as 400,000 barrels of crude oil per day. Typically, when the oil theft operation is finished, the pipeline is left open, which results in an oil spill.[14] Amnesty International and Friends of the Earth International contested Shell's claims that up to 98% of all oil spills in Nigeria were due to sabotage.[15] The two groups filed a complaint against the company in the OECD. Under Nigerian law, Shell has no liability when spills are classified as result of sabotage.[16] Soon after, Shell representatives were heard by the Dutch Parliament and Shell revised its estimates from 98% to 70%. It was the second time the company did such a large revision to its oil spill statistics.[17] A Dutch court ruled in 2013 that Shell is liable for the pollution in the Niger Delta.[18]

Ejama-Ebubu spill case

In 1970 an oil spill occurred that affected 255 hectares and the Ejama-Ebubu community in the Rivers State.[19] In July 2010 the Federal High Court of Nigeria set damages against Shell Petroleum Development Company of Nigeria Limited, SPDC, at 15.4 billion Nigerian naira[19][20] (about 100 million US dollars).

References

  1. ↑ Royal Dutch Shell plc (2009): Shell in Nigeria: Our Economic Contribution
  2. ↑ http://www.lubconinternational.com/history-of-the-oil-industry Retrieved 26 November 2012
  3. ↑ http://news.bbc.co.uk/2/hi/africa/7840310.stm Retrieved 26 November 2012
  4. ↑ Shell and Kaztec Engineering Limited sign pipeline deal in Nigeria, Africa: Oil Review Africa, 2013
  5. ↑ Associated Press (March 25, 2014). "Shell Nigeria calls "force majeure" for exports". The Washington Post. Retrieved March 26, 2014.
  6. ↑ "Shell Nigeria calls "force majeure" for exports". Business Recorder. March 26, 2014. Retrieved March 26, 2014.
  7. ↑ United Nations Economic and Social Council report Situation of human rights in Nigeria, submitted by the Special Rapporteur of the Commission on Human Rights, Mr. Soli Jehangir Sorabjee, pursuant to Commission resolution 1997/53
  8. 1 2 Okonata, Ike; Douglas,Oronto (2003). Where Vultures Feast. Verso. ISBN 1-85984-473-1.
  9. ↑ Karen Suassuna (2001). "Contamination in Paulina by Aldrin, Dieldrin, Endrin and other toxic chemicals produced and disposed of by Shell Chemicals of Brazil" (PDF). Greenpeace. Retrieved 29 June 2006.
  10. 1 2 http://amlawdaily.typepad.com/amlawdaily/2009/06/a-win-for-wiwa-a-win-for-shell-a-win-for-corporate-human-rights.html
  11. ↑ BBC news (11 June 2004). "Shell admits fuelling corruption". BBC News. Retrieved 29 June 2006.
  12. ↑ The Shell Petroleum Development Company of Nigeria Limited (2003). "People and the Environment Annual Report" (PDF). Archived from the original (PDF) on 3 November 2005. Retrieved 29 June 2006.
  13. ↑ Mouawad, Jad (9 June 2009). "Shell to Pay $15.5 Million to Settle Nigerian Case". The New York Times. Retrieved 23 May 2010.
  14. ↑ "Shell contains Nigeria oil spill, Bonny affected". Reuters. 28 May 2008. Retrieved 27 July 2010. oil had spilled from its Nembe Creek trunk line
  15. ↑ Gismatullin, Eduard (25 January 2011). "Shell Accused of Misleading Data Over Nigerian Spills". Bloomberg. Retrieved 27 January 2011.
  16. ↑ "Shell, Amnesty Dispute Oil Spill Claim". 25 January 2011. Retrieved 27 January 2011.
  17. ↑ "Oil spill: Shell modifies data to 70% from 98%". 27 January 2011. Retrieved 27 January 2011.
  18. ↑ Raymond Ridderhof (February 15, 2013). "Shell and Ogoni People : (s)oil pollution in the Niger Delta". Peace Palace Library. Retrieved March 18, 2014.
  19. 1 2 Anaba, Innocent (6 July 2010). "Oil spill: Shell to pay N15.4bn". Vanguard Media Limited. Retrieved 27 July 2010.
  20. ↑ "Shell And The N15bn Oil Spill Judgement Debt". The Daily Independent (Lagos). 19 July 2010. Retrieved 27 July 2010.

External links

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