Nigeria demands N884b compensation from Shell

Nigeria demands N884b compensation from Shell

Monday, May 2, 2016 3:37 pm

 Ben van Beurden, Chief Executive Officer of Royal Dutch Shell

Ben van Beurden, Chief Executive Officer of Royal Dutch Shell

By Akin Kuponiyi  

President Muhammadu Buhari has authorised  the  Attorney General of Federation and Minister for Justice alongside National Oil Spill Detection and Response Agency (NOSDRA)   to commence legal action against  Shell Nigeria Exploration and Production Company,  on behalf of 350 communities in Delta and Bayelsa states affected by Bonga Oil spills of 20  December 2011.

The country is  demanding  N784Billion as compensation for oil spillage that destroyed the affected communities.

Nigerian Government is also demanding for another  sum of N495Billion  as restitution and restoration of the devastation of the Economic Zone of  the Nigeria territorial waters,and N50million as cost of this legal action.

Joined as co-defendants in the  legal battle are,Shell Petroleum N.V, B.V Netherlandse International Indusrie-E Handel Maatschappij,The shell Transport and Trading Company Plc,and Royal Dutch Shell Plc who are all allied companies of Shell Nigeria Exploration and production Company.

A Deputy Director,Oil field assessment department of NOSDRA,Mr Akindele Olubunmi in an affidavit filed at a Federal high Court Abuja said he  has the consent and the authority of, President Muhammadu Buhari,A A Malami SAN, Attorney General of the Federation and the Director General of NOSDRA to bring  the Legal action  in relation to damage and devastation done to the exclusive Economic Zone,Ecosystem,marine life,and the environment caused by Bonga crude Oil spills of December 20,2011.

A Lagos lawyer,Barrister Awosika Dada Adekunle is handling the case.

The Nigerian Government alongside,NOSDRA are also suing in order to protect the interest of Fishermen and persons affected by the Bonga crude oil spillage numbering about 285,000 persons from 350 communities and satellite Villages with their consent to institute this suit.

Mr Olubunmi averred that around 20th December 2011, Shell in the course of their Oil and Gas exploration activities within OML 118 approximately 120 Kilometers off the coast of Guinea,recorded a record oil spill.

This happened when the  export line linking their Float Production Storage and Offloading (FPSO) vessel at their Bonga Field deep offshore, which was  supplying crude oil to a tanker (MV NORTHIA),ruptured and thereby spewed out crude oil into the Sea.  The incident was reported to the Federal Government that same day through NOSDRA

The defendants admitted spewing out 40,000 barrels of crude Oil into the sea causing devastating and degradation of the aquatic life, Marine environment including the territorial waters of Nigeria along Niger Delta axis and destroy the sea beds and aquatic lives in the continental Shelf within the Nigeria exclusive  Economic Zone. There were severe disruptions to communities,Persons,Properties and lives of people in the shoreline area as a result of the spill.

The plaintiffs,commissioned consultants and expert,in collaboration with other stakeholders that included,Nigeria Maritime and Safety Agency,Nigeria National Assembly Committee on Environment and Ecology to carry out the mapping area that suffered economic losses and damages.

Aftermath of all the investigations and in line with their statutory duties and Obligations,the plaintiffs notified the defendants of their decision to pay $3,600,191,206. representing compensation to the 350 communities and satellite Villages impacted by the Bonga Oil spill disaster and Punitive damage which is to be paid to the plaintiffs as sanction totaling $1.8Billion from the said sum to deter occurrence of such dastardly act

However, it was alleged that despite the facts that the defendants have processed and received insurance claims for the crude Oil spillage that occurred at OML 118 Bonga Oil Field on December 20,2011,the defendants have refused and neglected to pay compensation,Punitive damage and cost of restoration,restitution and redemption of the environment statutorily assessed by the plaintiffs.

The plaintiffs punitive compensation was adopted after the United States Supreme court decision of 25th June,2008 against Exxon Valdez in Wallings Versus Waillings and in line with international best practices as it has been seen in other climes like Equadorian court awarded $9.5billion against Chevron Corporation and most recently in the United States of America,British Petroleum in April 2011 settled and agreed to pay $20Billion oil spill at Gulf of Mexico to be share among various communities directly impacted by the disaster.

Consequently, the plaintiffs are now seeking the following reliefs from the court

An order directing the defendants to pay the sum of N712.8 billion  to the plaintiffs as compensation to the affected communities

An order directing the defendants to pay the sum of N71.2 billion representing administrative costs and fees to the consultants and experts engaged to carry out damage assessment.

An order directing the defendants to pay to the plaintiffs the sum of N495 Billion for restitution and restoration of the damage and devastation of the Nigeria territorial waters occasioned by the negligent conduct of the defendants

An order of the court directing the defendants jointly and severally to pay the plaintiffs N50million as cost of this legal.


Meanwhile,based on an application filed and argued before the court by plaintiffs counsel Mr Dada Awosika,seeking the order of the court to serve court process on four of the defendants who are based outside the country,the presiding judge,Binta Murtala Nyako while adjourning the case to 6th of June,2016 for mention ordered that all the court process in the case should be served on,Shell Petroleum N.V,B.V Netherlandse International indusrie-e handel Maatschappij, the Royal Transcorp and Trading Company PLC and Royal Dutch PlLC

The author, Akin Kuponiyi can be reached  at: [email protected]

*Updated: Errors in the figures have been corrected: the total claim is N784 billion and not N884billion. And this excludes a separate demand of N495 billion.



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