YEAC tells Shell to address liabilities before onshore divestment

– Urges FG not to approve SPDC’s sale

Mkpoikana Udoma

Port Harcourt — The Youths and Environmental Advocacy Centre, YEAC Nigeria, has urged Shell (SHEL.L) to address all the liabilities ranging from environmental pollution and community equity in the Niger Delta before divesting its onshore subsidiary in Nigeria.

This is as Shell (SHELL) on Tuesday announced plans to sell its Nigerian onshore oil and gas subsidiary in Nigeria – the Shell Petroleum Development Company of Nigeria Limited – to Renaissance, a consortium of five companies, for the sum of $2.4billion.

Renaissance, a consortium made up of five indigenous oil operators, namely ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin, will pay $1.3 billion for consideration, according to Shell, and an additional payment of $1.1 billion relating to prior receivables at completion.

But in a swift reaction, YEAC-Nigeria said the British oil firm was free to sell its onshore oil stake in Nigeria to any prospective buyer, provided issues around liabilities of Shell in its host communities were addressed.

Executive Director of YEAC-Nigeria, Mr. Fyneface Dumnamene Fyneface, urged the federal government not to approve the sale of SPDC by Shell until there is a blueprint on liability and community equity.

Fyneface said and called on the Federal Government not to approve the proposed sale of Shell onshore business facilities till all issues relating to liabilities have been addressed with communities in the Niger Delta through a blueprint presented as part of the ownership transfer process.

“Shell has lots of liabilities especially those relating to Court judgements for payment of compensation to communities which they polluted, as well as oil spill clean up cases which they need to address before talking about the sale of their onshore oil stake.

“For instance, the Ebubu community in Ogoni has an oil spill case in which Shell was expected to make compensation following a court judgment, but that has not been properly addressed, and the company cannot go ahead to sell its facilities without addressing associated liabilities which the new buyers may not want to inherit.”

YEAC-Nigeria also urged the prospective SPDC buyer, Renaissance, to be careful in their purchase and be aware that the liabilities of Shell will be transferred to them.

“It is also important that host communities in the Niger Delta are carried along to participate in this $2.4billlion sale and some percentage ceded to the communities as equity ownership to create a buy-in by the people and an enabling environment for the smooth operation of the new operators being the new buyers.

“The Federal Government should not approve the proposed sale of Shell onshore business facilities till all issues relating to liabilities have been addressed with communities in the Niger Delta through a blueprint presented as part of the ownership transfer process.”