Adedapo Adesanya
By Adedapo Adesanya
A Nigerian court has stopped Shell Plc from selling any of its assets in Nigeria until a decision is reached on the company’s appeal of a nearly $2 billion penalty for an alleged oil spill.
The news came as the Shell Petroleum Development Company of Nigeria (SPDC), a local subsidiary of Shell Plc, on Monday declared force majeure on Bonny Light crude oil exports.
The energy firm said the force majeure is effective March 3 and that this is due to a slump in flows to the export terminal.
According to a report by Reuters, quoting a copy of a court ruling issued on March 11, Shell was ordered to deposit the money in an account controlled by the court within two working days.
A panel of three judges said Shell, acting through its agents or subsidiaries, was restrained from “selling, allocating, vandalising or disposing off any of its assets/properties …” pending the determination of the appeal.
Shell’s appeal hearing is set to begin on May 5.
A spokesperson for Shell’s Nigeria unit said the company would immediately appeal the decision, according to the Reuters report.
“We are disappointed at this outcome. We have a strong belief in the merit of our case and will take immediate steps under the law to appeal and stay the execution of the decision until the appeal is determined,” the spokesperson said.
This is not the first time the oil major has come under judicial order as a Federal High Court in November 2020 ordered Shell to pay an equivalent of N800 billion ($1.95 billion) to 88 communities of Egbalor Ebubu in Rivers state, who had accused the company of an oil spill that damaged their farms and waterways.
The oil giant, which denied causing the spill, then appealed the verdict.
Shell started talks with the Nigerian government last year about selling its stake in Nigeria’s onshore fields, where it has been active since the 1930s, as part of a global drive to reduce its carbon emissions.
Last year, it agreed to pay a Nigerian community $111.68 million to settle a case over an oil spill that took place more than 50 years ago.
