Shell Plc has been ordered by a Federal High Court in Owerri, the capital of Imo State in south-eastern Nigeria, to halt all preparations to sell up its offshore assets in the country.
A three-judge panel ordered Shell to put all plans for asset sales on hold indefinitely until the company’s appeal against a $2 billion penalty imposed on it in 2020 for oil leakage and environmental degradation is resolved.
Shell was also ordered by the three-judge panel to put the $2 billion judgement sum into a court-controlled account right away, and it must be completed within two working days.
Farmers of the Ejalawa village in Rivers State, Nigeria, sued Shell and its joint venture partner, the Nigerian National Petroleum Corporation (NNPC), in January 2020, alleging environmental destruction. After months of deliberation, a federal judge found in favour of the community after determining that a Shell-operated abandoned pipeline spilt enormous volumes of petroleum, destroying the ecosystem and waterways.
Shell Nigeria is the common term for Shell plc’s operations in Nigeria, which are managed by four subsidiaries, the most important of which is Shell Petroleum Development Company of Nigeria Limited. Shell’s joint ventures are responsible for more than 21% of Nigeria’s total petroleum production, with over 80 fields.
It has been one of the most criticised IOCs for spilling the most crude oil, therefore harming the ecology of numerous host communities in Nigeria’s Niger Delta region.
In Nigeria, the firm is no stranger to court orders. Shell Petroleum Development Company (SPDC) told the Federal High Court in Abuja in August 2021, after a 31-year legal battle with the Ogoni communities in Rivers State, Nigeria, that it would pay about N45 billion in judgement debt awarded against it over oil spillages that occurred in 1970, per the High Court’s decision, which was affirmed by the Supreme Court.
SHELL’S ANNOUNCEMENT IN 2021
In Q2 of 2021, the company announced that it would sell all of its offshore assets in Nigeria to focus solely on deepwater projects. Since the announcement, many significant Nigerian oil producers (including Seplat Petroleum and Sahara Group) have expressed interest in purchasing the properties.