Shell, Rivers face-off over OML 11, Kidney Island brews up for epic battle

• Rivers takes over Kidney Island
• State says implementing court judgement
• Shell says action premature‭, ‬unlawful
• Cites on-going appeal court matter fixed for January 14‭, ‬2021

A drama that began in 2019 and which is being directed by Governor Ezenwo Nyesom Wike of Rivers State that involves a lucrative oil asset being superintended by the oldest operating international oil company in Nigeria, Shell Petroleum Development Company (SPDC) is beginning to brew up to enter a dramatic stage.

Last Wednesday, Rivers State officials, including its attorney general, went to seal up Shell operational base known as Kidney Island, in what they said was an enforcement of a court judgement. But it was when the formerly quiet Shell decided to issue a statement over the action that it became clear that the stage was being set up for an epic battle over the assets in question.

Rivers Government finally took over Shell Petroleum Development Company’s Kidney Island base in Port Harcourt, and said it was enforcing her interest in the acquisition of 45 per cent equity stake in Oil Mining Lease (OML) 11.  The state attorney-general and justice commissioner, Zacchaeus Adangor, sealed off the site midweek and said he was acting on the authority of a state high court judgement in July and September 2019.

The facility located at Kidney Island area of Diobu, Port Harcourt Municipality, has been used as Shell’s operational base in Port Harcourt.

Adango (SAN), said: “Kidney Island, which was once used as Shell Petroleum Development Company operational base in Port Harcourt, now belongs to the Rivers State Government pursuant to a certificate of purchase registered in the Lands Registry as No. 6 at page 6 in Vol. 46, Port Harcourt.” He cited that the certificate of purchase of the facility “was issued by the order of the High Court of Rivers State on July 23, 2019 and September 25, 2019 following the purchase of the facility.

In November (2020), the Supreme Court reaffirmed Rivers Government’s acquisition of SPDC’s interest in OML 11 and Kidney Island, when it dismissed the oil firm’s suit which sought to set aside the judgment made against it in 2019 in favour of the Ejama-Ebubu community.

The Rivers’ attorney-general gave a long explanation on the facility’s history that culminated into its latest controversy. “You will recall that sometime in 2017, the people of Ejama-Ebubu secured judgement against SPDC and its subsidiaries in the sum of N57.7 billion for the damages done to their environment arising from the oil spill from the Trans-Niger pipeline. After that judgement, Shell refused to pay the judgement sum; and thereafter proceeded to levy execution by attaching the moveable properties of SPDC. But those were found to be grossly insufficient to settle the judgement sum. Subsequently, the Ejama-Ebubu community approached the court to seek the leave of the court to attach the immovable properties of SPDC; and the court granted them that order. Following the grant of that order, there was a court order for sell off some of the properties of SPDC, including Kidney Island and the acquisition of Shell interest in OML 11.”

In September last year, Governor Nyesom Wike had announced the acquisition of SPDC’s 45 per cent interest in OML 11 oilfields and Kidney Island in the state. The governor, following a court order to auction SPDC assets in the suit against Ejama-Ebubu community, had directed the Rivers State Ministry of Finance Incorporated to make a bid of USD 150,000,0900.00 supported by a bank guarantee and cash payment to the deputy sheriff in the sum of N1 billion, the later payable to the Judgement Creditors while the form that Rivers government under his watch had purchased Shell’s 45 percent interest in OML 11 amounting to $150 million, which the state paid via a cheque.

But Shell has hotly “disagreed with the purported takeover of the controversial Kidney Island asset of SPDC Joint Venture in Port Harcourt by the Rivers State Government in the exercise of rights purportedly acquired through a court auction process that is still the subject of on-going appeals at the Court of Appeal sitting in Port Harcourt.”

Bamidele Odugbesan, media relations manager of Shell in a statement sent to Business A.M. in Port Harcourt, said: “There is a pending litigation by SPDC in which the Federal High Court has issued an interim order restraining further enforcement of the underlying Agbara judgement pending the hearing of the motion on notice fixed for January 14, 2021.”

SPDC therefore calls on the Rivers State Government and those claiming interest in the SPDC Kidney Island asset, to stay further action to allow the due process of the law as enshrined in the Nigerian Constitution. We remain of the view that until the pending appeals are heard and determined, any exercise of rights, including any attempt to take over or seal up SPDC JV’s assets by the Rivers State Government is premature and unlawful.”

Shell’s undoing perhaps was its initial refusal to pay the earlier judgement sum of N57.7 billion. Its inaction is analogous to Agip, the Nigerian affiliate of Italian Eni, which would soon be expected to be faced with N30-N50-billion judgement sum over its human rights violation in Tugogbene, a Bayelsa oil community. The oil company had refused to pay an initial judgement sum of N1.2 billion in 2018 awarded by a Bayelsa high court. Like Shell’s present scenario, Agip went on appeal. But last November 9, the appeal court in Port Harcourt upheld the lower court’s ruling with its 10 percent monthly interest paraphernalia.

Steven Obodoekwe, south-south zone director of Civil Liberties Organization (CLO), Celestin AkpoBari, national coordinator of Ogoni Solidarity Movement and Georgewill Ennefaa chairman of Rivers Civil Society had told Business A.M. in separate interviews that the international oil companies (IOCs) were evidently notorious in habitually not eager to obey Nigerian court rulings in matters relating to their oil production activities in host communities. But now, the two (Shell and Agip) are at the receiving end. Perhaps, the chickens have come home to roost.

According to Adangor, the Rivers attorney-general, after the court order, a public auction was held by the officers of the Rivers judiciary, with the state government bidding for purchase of the Shell Kidney Island and its interest in OML 11. Also, a representative of the office of the Deputy Sheriff, High Court, Port Harcourt, Livinus Akere said the exercise was to take vacant possession of Kidney Island auctioned on the 13 August, 2019 and OML 11 in Ejama Community of Eleme Local Government Area.

At the Kidney Island operational base, the justice commissioner said: “We are here to execute the judgement of the High Court of Rivers State, and secure the enforcement of the interest acquired by the Rivers State Government.” He said the state government successfully executed the enforcement, as Shell in all fairness did not resist the enforcement.

“It was lawfully purchased through public auction ordered by the court pursuant to a court judgement; hence everything went in accordance with the due process of the law. The Rivers State Government successfully executed the enforcement and in fairness to Shell, there was no resistance during the exercise. I was on ground to ensure that everything was done smoothly and in accordance with the law,” he told journalists midweek.