Supreme Court affirms Rivers’ purchase of Shell’s assets in OML 11, Kidney Island

• State weighed in to bid for assets purchase at $150m – says Gov. Wike
• Would Shell leave Rivers, having lost a critical case with double-barrelled implications

Nigeria’s apex court, the Supreme Court on Friday affirmed Rivers State’s acquisition of 45 percent equity stake of Shell Petroleum Development Company (SPDC) in Oil Mining Lease (OML) 11 and Kidney Island in Port Harcourt. Rivers government acquisition of OML 11 and Kidney Island was affirmed by the apex court, when it dismissed the multinational oil firm’s suit which sought the setting aside of a N17 billion judgment made against it in 2019.

Governor Nyesom Wike, had in September last year announced the state government’s acquisition of Shell’s 45 percent interest in OML 11 oilfields and Kidney Island in the state. The governor had then directed the state Finance Ministry Incorporated, to make a bid of US$ 150,000,000.00 supported by a bank guarantee and cash payment to the deputy sheriff in the sum of N1 billion, the latter payable to the judgement creditors, while the former is escrowed.

Shell, having lost its matter at the Court of Appeal, the Ejama Ebubu community commenced enforcement by domiciling the judgement in the state High Court, and levying execution on SPDC’s moveables in its Industrial Area (known as Shell I.A) in Port Harcourt.

The oil giant later invited the community, and offered them N7 billion, against the N194 billion judgment debt. But the community rejected the offer. Afterwards, the community approached the court for an order granting them leave to sell SPDC’s immovable property comprised in OML 11 and their Kidney Island support base in Port Harcourt.

It was on this basis, that the Rivers State government placed advertisement of the said immovable assets for auction after the state attorney general and commissioner for justice alerted the state government of the matter.

Governor Nyesom Wike said that, rather than standby and watch other persons or group purchase Shell’s 45 percent interest in OML 11, and further exacerbate the poverty of the people of the state, the state government had to weigh in and bid for purchase of SPDC’s interests already set down for auction.

The Supreme Court had in January 2019, upheld the judgement of the Court of Appeal, which had awarded N17 billion damages against Shell for a devastating oil spill that ravaged farmlands, rivers and streams in Ejama Ebubu in Eleme local government area of Rivers five decades ago. Shell, in July last year, filed a suit at the Supreme Court asking the apex court to set aside its earlier judgment on the grounds that the apex court did not go into the merit of their appeal before upholding the decision of the Court of Appeal. But the apex court in a unanimous judgment prepared by Centus Nweze and delivered by Chukwudumebi Samuel Oseji, asserted that the appeal filed by Shell was frivolous and lacks merit. Oseji declared that the Supreme Court cannot revisit its earlier decision on the matter. To this end, the court dismissed Shell’s appeal for being incompetent and lacking in merit. In addition, the apex court held that parties should bear the costs of their litigation.

The Ejama community had filed a suit against Shell over un-remedied pollution that took place since 1970, as admitted by SPDC vide letters they wrote seeking to clean the spill in 2006, while the case was at the trial court. The suit between Shell and Ejama Ebubu community was finally disposed in 2017. But Shell and its parent companies took out a further appeal to the Supreme Court same year, which appeal was considered and dismissed by that Court in a judgment read by B. Akaahs.

After losing at the High Court, Shell gave the successful Ejama Ebubu plaintiffs a Bond Guarantee stipulating that First Bank of Nigeria Limited would pay them the value of the judgement debt and interests thereon in the event that SPDC’s appeal to the Court of Appeal fails at that Court.

Would Shell leave Rivers, a state it has operated oil business for more than half-a-century, after losing a critical case with double-barrelled implications? Some oil industry analysts do not believe so.

According to Friday Udoh, Shell’s commitment in the state far outweighs the consequences of the N17 billion damages and $150 million stake in OML 11.