In a significant development on Friday, Nigeria’s Supreme Court has ruled in favor of Shell, allowing the energy giant to have a hearing regarding an alleged oil spill in the Niger Delta, Reuters reports.
This decision comes after the Court of Appeal had halted an asset sale and mandated a judgment claim payment before proceeding with the case.
The legal battle began in November 2020 when a High Court ordered Shell to pay 800 billion naira ($878 million) to the communities of Egbalor Ebubu in Rivers state. The communities accused Shell of causing an oil spill that led to damage to waterways and farms. Shell denies any responsibility for the spill.
Attempting to prevent the High Court’s judgment from being executed, Shell appealed, but the Court of Appeal not only rejected the appeal but also instructed Shell to deposit the specified amount in a court-controlled account before their appeal could move forward.
Last June, Shell was further directed to temporarily halt the disposal of local assets until the Supreme Court’s ruling. This pause aimed to ensure that any compensation owed to the Niger Delta Community would be addressed.
Mohammed Ndarani, the community’s lawyer, revealed to Reuters that the Supreme Court has now returned the case to the Court of Appeal. The Supreme Court’s ruling emphasized that the appeal court had not thoroughly examined the merits of the case and directed that Shell should be granted a hearing.
This case holds broader implications, especially after the Nigerian oil regulator’s refusal to approve Exxon Mobil’s $1.28 billion asset sale to Seplat Energy in 2022. This decision has raised concerns among international oil companies about the challenges of selling assets in Nigeria.
Shell, aligning with other major oil players in the country, is shifting its focus towards deep-water drilling and divesting from onshore operations. Onshore operations are susceptible to crude theft and pipeline vandalism, which have been impacting Nigeria’s oil production.