Adedapo Adesanya
By Adedapo Adesanya
One of the big international oil companies, Royal Dutch Shell, may consider reducing or even putting an end to its operations onshore Nigeria if certain issues persist.
The chief executive of Shell, Mr Ben van Beurden, said the management will take a “hard look” into its business in Nigeria, the largest producer of crude oil in Africa, as a result of weak performance.
The firm reported a weak result largely due to the Coronavirus pandemic last year, which forced various governments across the globe to impose lockdowns.
But the lockdown was not the only problem Shell encountered in Nigeria as it also suffered heavily from crude oil theft and attacks on its facilities.
These are already making the executives of the company have sleepless nights and if the organisation is to continue to remain in Nigeria, solutions to the identified problems must be found.
Shell said the persistent crude oil theft sabotage in the Niger Delta are affecting its operations.
“Our onshore oil position, despite all the efforts we put in against theft and sabotage, is under challenge.
“But developments, like we are still seeing at the moment, mean that we have to take another hard look at our position in onshore oil in Nigeria,” Mr van Beurden said.
Shell has been flagging for years problems with crude oil theft on its pipeline network onshore Nigeria and last week, a Dutch court held Shell’s Nigerian subsidiary responsible for multiple oil pipeline leaks in the Niger Delta and ordered it to compensate Nigerian farmers for two oil spills in the country 13 years ago.
It is the first lawsuit in which a company has been held liable in The Hague, the Netherlands for its actions abroad.
The ruling of the Dutch court is setting the path for future lawsuits brought against oil firms in the countries where they are based, instead of the countries where oil spills or oil pollution has allegedly taken place.
Shell, for its part, continues to say that the spills were the result of sabotage, which has been frequent in the Niger Delta in Nigeria.
According to the company, “We continue to believe that the spills in Oruma and Goi were the result of sabotage. We are therefore disappointed that this court has made a different finding on the cause of these spills and in its finding that.
“Sabotage, crude oil theft and illegal refining are a major challenge in the Niger Delta.”
Shell’s Nigerian onshore joint venture, Shell Petroleum Development Company (SPDC), has sold about 50 per cent of its oil assets over the past decade.
