May 21, 2024
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OIL & GAS RENEWABLE ENERGY

Nigeria: Amnesty International Calls for Immediate Blocking of Shell Asset Sale

Forty civil society groups, led by Amnesty International are calling on the Nigerian government to block Shell Plc’s proposed sale of its onshore oil business in Nigeria.

The $1.3 billion deal, agreed upon in January 2024 with Nigerian-owned Renaissance Africa Energy, aims to fulfill Shell’s long-term goal of exiting operations in the challenging Niger Delta. However, the groups argue that the sale should not proceed until adequate safeguards for human rights are ensured.

The groups in a report on Monday, outlined several conditions that must be met before the sale can be approved. What they said according to the report reads: “There is now a substantial risk Shell will walk away with billions of dollars from the sale of this business, leaving those already harmed without remedy and facing continued abuse and harms to their health. Guarantees and financial safeguards must be in place to immediately remedy existing contamination and to protect people from future harms before this sale should be allowed to proceed. Shell must not be permitted to slip away from its responsibilities for cleaning up and remedying its widespread legacy of pollution in the area.”

According to Amnesty international, the deal “appears to fall far short of several regulatory and legal requirements. These include the apparent lack of an environmental study to assess clean-up requirements, and an evaluation to ensure sufficient funds are set aside for potential decommissioning of oil infrastructure – a sum that is likely to amount to several billions of US dollars. It also noted the lack of an inventory of the physical assets being sold, which is a red flag potentially indicative of the state of disrepair of pipelines and infrastructure from which many leaks have emanated.”

The delay in the approval of the deal, will pose great challenges in the Nigerian oil sector, as Other major players, including Exxon Mobil Corp., Eni SpA, and Equinor ASA, are also awaiting approval for similar asset sales.

Shell had un 2021, disclosed its intention to divest in its Nigerian onshore asset due to challenges that included oil theft and spills.

The delay in the divestment process was triggered by a lawsuit in Nigeria’s Supreme Court. A lower court instructed Shell to halt asset sales until it resolved a dispute with a Niger Delta community concerning alleged pollution.

 

 

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