NIGERIA/FILE: Two Nigerian government agencies recommend for Royal Dutch Shell to pay a total of 11.5 billion USD in compensation for damage caused by an oil spill at its offshore Bonga field in December 2011

Record ID: 236015

  • Title: NIGERIA/FILE: Two Nigerian government agencies recommend for Royal Dutch Shell to pay a total of 11.5 billion USD in compensation for damage caused by an oil spill at its offshore Bonga field in December 2011
  • Date: 28th March 2013
  • Summary: BONGA OIL FIELD, AT SEA (DECEMBER 26, 2011) (REUTERS) VARIOUS AERIALS OF BONGA DEEP SEA OIL FIELD VARIOUS OF SIGN READING IN ENGLISH "WELCOME TO BONGA" VARIOUS OF CONTROL ROOM AND MONITORS ON THE BONGA OIL FIELD VARIOUS AERIALS OF OIL SPILL IN THE SEA AERIAL OF CLEAN COASTLINE LAGOS, NIGERIA (DECEMBER 26, 2011) (REUTERS) VARIOUS OF PLANE ON TARMAC WITH WRITING IN ENGLISH "OIL SPILL RESPONSE" FOR CONTRACTED INTERNATIONAL CLEAN-UP WORKERS VARIOUS OF WORKERS LOADING CLEAN-UP PLANE VARIOUS OF INTERNATIONAL OIL SPILL WORKERS LOADING CHEMICALS ONTO PLANE VARIOUS OF PLASTIC CONTAINERS FILLED WITH OIL SPILL CLEAN-UP CHEMICALS
  • Embargoed: 12th April 2013 13:00
  • Keywords:
  • Location: At Sea, Nigeria
  • City:
  • Country: Nigeria At Sea
  • Topics: Accidents,Environment,People,Energy
  • Reuters ID: LVARY085BCKKSLYIS34ZCZR6ADW
  • Story Text: Two Nigerian government agencies told a parliamentary hearing on Wednesday (March 27) that Royal Dutch Shell should pay a total of 11.5 billion USD in compensation for damage caused by an oil spill at its offshore Bonga field in December 2011.
    Shell has said that there is no legal basis for the proposed fines and the Nigerian government has never publicly charged foreign oil companies large sums for oil spills.
    The national assembly can recommend fines the government should impose on oil companies but it has no power to enforce them.
    The National Oil Spill Detection and Response Agency (NOSDRA) told the national assembly Shell should pay 5 billion USD as a fine for environmental damage caused from a 40,000 barrel spill on Dec. 20, 2011 at the Bonga offshore rig.
    The Nigerian Maritime Administration and Safety Agency (NIMASA) sought 6.5 billion USD as compensation for 100 communities it says were affected onshore by the oil spill, which was one of the biggest in the history of Africa's largest energy industry.
    Shell has taken responsibility for the Bonga offshore oil spill but says onshore damage was the result of a different spill a few days later that wasn't its fault. It said it has cleaned up areas affected by both spills.
    Chike Onyejekwe, managing director of Shell's offshore Nigeria unit told lawmakers that Shell would carry out a post-impact assessment to determine the effects of the oil spill on the environment.

    "By May, the contractor will get to the site and start activities so hopefully by the third quarter this year the completion and laboratory and data analysis by the contractor will be through."

    "But as far as some of the issues raised here today I cannot answer them until you have the post impact assessment report. Also I want to also put it on record that as of today just as... I also have a lot of claims and I have replied to over 250 or 280 letters of claims. We will keep replying to them, so it is not that everything is dormant it's just that as claims come, we also have to reply and wait for the outcome of this post impact assessment to start making any meaningful deductions of what happened and what did not happen," he added.
    The national assembly told Shell to submit its clean-up plans and assessments to lawmakers next week when a date for a future hearing would be set.
    Teemac Omatshola Iseli, a representative of some of the affected communities, said:
    "The community has never asked for a certain amount, it was the agencies who came up with 5 billion and 6.5 billion dollars compensations. The communities will be happy if there is a reasonable compensation. They are not greedy, they need to live, they need to continue to exist."
    NOSDRA and NIMASA are asking Shell for compensation which would equate to around 287,500 USD per barrel for the 40,000 barrel Bonga spill.
    In comparison, BP has total provisions of 42.2 billion USD for compensation for the 4 million barrels spilled in the spill in the Gulf of Mexico in 2010, which amounts to around 10,550 USD per barrel.
    Hundreds of thousands of barrels of oil are spilled in the mangrove creeks onshore Nigeria every year, destroying the environment and livelihoods.
    Many are caused by sabotage or oil theft, but a United Nations report in 2011 said oil firms don't do enough to clean up spills and maintenance of infrastructure was inadequate.
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