Shell halts sale of Nigeria onshore oil assets

BY HABEEB ADAMU

Oil giant Shell has suspended plans to sell its onshore oil assets in Nigeria in compliance with a Supreme Court ruling that said it had to wait for the outcome of an appeal over a 2019 oil spill.

The London-based company said in a statement on Thursday that it welcomed the Nigerian Supreme Court’s decision to hear the appeal of the Shell Petroleum Development Company of Nigeria Ltd (SPDC) in the case.

“Until the outcome of SPDC’s appeal, Shell will not progress the divestment of its interest in SPDC,” it said.

Nigeria’s Supreme Court on June 16 upheld a lower court ruling that stopped Shell from selling its assets in Nigeria until a dispute over a lower court decision to award a Niger Delta community $1.95 billion in compensation over the spill is resolved.

Shell plans to sell its 55 percent stake in SPDC, which it also operates, as the joint venture struggles with hundreds of spills that are caused mostly by theft.

The company has faced a string of court cases in the past over oil spills, but says it remains its “strategic intent” to sell its SPDC stake while continuing to invest in offshore oil and gas as well as onshore gas production.

“However, such investment will require a stable and competitive investment climate,” Shell said.

Osagie Okunbor, managing director of SPDC and chairman of Shell Companies in Nigeria, in a statement said the joint venture would continue to comply with the Supreme Court’s order to maintain the status quo.

“The Shell Petroleum Development Company of Nigeria Ltd (SPDC) complies with the law, including any court orders, and respects the judiciary and its role in upholding the rule of law,” Okunbor said.

88 communities in Rivers State were awarded compensation for an oil spill they blamed on Shell and which damaged their farms and waterways. Shell denies causing the spill.

The community sought and was granted a court order blocking Shell from disposing its assets. The company was also ordered to put the $1.95 billion into an account nominated by the court until the legal dispute was settled.

“Recent media reports regarding the June 16 Supreme Court proceedings do not accurately reflect SPDC’s response to the order. SPDC will continue to comply with the Supreme Court’s order to maintain the status quo. We have a strong belief in the merits of our case, which we are vigorously defending,” Okunbor said.