Shell in Talks with Nigerian Government Over Onshore Oil Fields in the Niger Delta

Shell has already embarked on a gradual asset disposal program in Nigeria for more than a decade, as it looks to resolve several pollution instances caused by its ruptured pipelines and continuous legal battles with local communities.
Publish Date
20th May 2021
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Read Time
3 minutes

With issues such as its spill-prone operations that are not compatible with its plans to go green and to achieve net-zero carbon emissions by 2050, Anglo-Dutch company, Royal Dutch Shell Plc, may be selling all of its onshore assets in Nigeria.

Shell has already embarked on a gradual asset disposal program in Nigeria for more than a decade, as it looks to resolve several pollution instances caused by its ruptured pipelines and continuous legal battles with local communities.

In the Company’s annual general meeting (AGM) that held on Tuesday, 18th May 2021, the Chief Executive Officer, Ben van Beurden, told investors that “the balance of risks and rewards associated with our [shell’s] onshore portfolio is no longer compatible with our [shell’s] strategic ambitions.”

He said: “We cannot solve community problems in the Niger Delta” and the company has started discussions with the government on how to move forward.

Shell has already committed itself to the Paris Agreement and has pledged to transform itself into a clean energy giant, and gradually move away from the oil and gas business to achieve net-zero carbon emissions by the targeted year, 2050.

When asked to comment on the new report from the International Energy Agency stating that the world needs to stop developing new oil & gas fields immediately to prevent climate change in the future, Chairman Chad Holliday said the Company was yet to study the report and would do so soon.

According to World Oil, “Preliminary votes on two competing climate proposals — one put forward by Shell and another by activist group Follow This — showed broad investor support for the firm’s energy-transition plans, which see a big expansion in clean energy but also decades more oil and gas production.”

The CEO didn’t explicitly state that Shell will be selling its remaining oil assets in the Niger Delta, nor did he give a timeline, but the Company has massively reduced its onshore licenses in Nigeria by half over the past decade.

At the meeting, investors questioned Shell’s climate strategy and asked the company to set more ambitious targets on reducing carbon emissions and phasing out fossil fuels, to a request that the company “stop apologising” for the products it sells.

One of Shell’s Ongoing Litigation

Aiteo Eastern E&P Co., who bought a major oil pipeline from Shell six years ago, is in a legal battle with the company and is requesting billions of dollars in damages, as it claims Shell misrepresented the condition of the line and under-counted the volume of crude one of its facilities received from the company. In response to the allegation, Shell referred to Aiteo’s lawsuit as baseless.

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