Royal Dutch Shell has disclosed possible outright exit from onshore terrain due to persistent challenges associated with crude oil theft and sabotage in Nigeria’s Niger Delta.
This, the oil major said it was considering alongside taking a ‘‘hard look at its operations onshore Nigeria.
Shell Chief Executive, Ben van Beurden, maintained that all the company’s efforts to end crude theft and sabotage have been rocked by challenges.
“Our onshore oil position, despite all the efforts we put in against theft and sabotage, is under challenge,” van Beurden told reporters after Shell reported another set of weak Big Oil results affected by the pandemic.
“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,” Shell’s top executive added.
The last time the supermajor took a hard decision at its onshore operations, it sold off its stakes in some of its critical oil blocks.
Shell has been flagging for years problems with crude oil theft on its pipeline network onshore Nigeria.
In 2015, Shell Nigeria subsidiary, Shell Petroleum Development Company of Nigeria Limited, re-assigned its interest in oil mining lease (OML) 29 and the Nembe Creek Trunk Line (OML29 and NCTL) and related facilities in the Eastern Niger Delta to a Nigerian indigenous oil firm, Aiteo Eastern E&P Company Limited for $1.7 billion.
In 2014, the company also sold 45 per cent of its stake in OML 18 to a consortium that included Canadian company, Mart Resources Inc. as part of attempts to reduce its presence to Nigeria, which is currently facing a spate of attacks from armed Niger Delta militant groups.
Last week, The Hague Court of Appeal ordered Shell to compensate Nigerian farmers for two oil spills in the country 13 years ago, in the first lawsuit in which a company has been held liable in the Netherlands for its actions abroad.
The ruling of the Dutch court is setting a precedent 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.
“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” the Nigerian unit of Shell is liable, the Anglo-Dutch major said in a statement, as carried by Bloomberg.
“Sabotage, crude oil theft and illegal refining are a major challenge in the Niger Delta,” Shell noted.
