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Divestment: Civil Society Council issues 48-hour ultimatum to Shell

The National Civil Society Council of Nigeria (NCSCN) has rejected the divestment deal being planned by the Shell Petroleum Development Corporation (SPDC) without first resolving the pending cases of pollution and degradation against it by the victimised residents and communities of the Niger Delta region.

The group said it would mobilise Nigerians to embark on nationwide protests against Shell Company as well as the occupation of all its offices if it saw the divestment deals as an escape route.

Recall that Shell, an international oil company, had reached an agreement to sell its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a consortium of five companies made up of ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin. However, the completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions.

Addressing a press conference in Abuja, the Executive Director of NCSCN, Comrade Blessing Akinlosotu, condemned the move, stating that it served as an unclean criminal getaway for the multinational corporation, leaving behind a legacy of environmental devastation, atrocities, and unresolved liabilities.

According to him, numerous court cases by stakeholders, farmers, and host communities against Shell Petroleum Development Company (SPDC) are being swept under the rug through these divestment deals.

He said, “It has come to the knowledge of the Council that SHELL has reached an agreement to sell its onshore Nigeria business to a group of five {5} local companies under Renaissance for $1.3 billion.

“SPDC owns 15 licences onshore and three in the shallow water, OML 74, 77 and 79. It has 458 million barrels of oil equivalent in proved reserves, as of the end of 2022. The sale deal will allow SHELL to focus on deep-water Oil and gas – including its retained stake in Nigeria LNG (NLNG).

“Therefore, Renaissance will acquire Shell Petroleum Development Co. (SPDC) in the following Deals conditions; In addition to the $1.3bn paid, Renaissance will pay up to $1.1bn, on receivables and cash balances for the business. The joint venture will pay most of this on completion. On closing, Shell will provide $1.2bn in secured loans. It will also provide additional financing of $1.3bn in the future to cover the development of feed gas for NLNG and its share of “specific decommissioning and restoration costs.

“SPDC staff will continue to be employed by the company as the ownership changes occur. Shell will also play a role in managing SPDC facilities that provide gas to NLNG. As an Organization, we consider this deal as an unclean criminal getaway by SHELL from Nigerian, environmentally damaging Niger Delta further, leaving behind monument atrocious situations, liability, high remediation cost of polluted environment, and compensation fees.

 

“In the same vein, there are also serious issues of abandonment, decommissioning, and relinquishment costs associated with ageing Assets and Environmental disasters already happening in the Niger Delta.

“NCSCN thinks that there are a plethora of pending court cases by  Stakeholders, Farmers, and Host Communities against SPDC, which they are running away from through these Divestment deals by transferring these Liabilities to the new Owners, who may not have the capacity to address and solve these years of criminal neglects and environmental injustice Environmental experienced by particularly the Niger Delta people and the Nigerian population through heightened exposure to pollution and corresponding health risks, limited access to adequate environmental services, and loss of land and resource rights.

“The patriotic intentions of NCSCN are to categorically put a Caveat Emptor, that is a BUYERS BEWARE notice and CALL on the Nigerian Government through the Regulatory Authorities to decline approval of the deal pending when Civil Society Council based on the adopted National Principle on Divestment, must have undertaken independent visits to host communities to ascertain the level of compliance with Nigerian and international laws on Divestment, Abandonment and Decommissioning.

 

“Secondly, SHELL must show publicly, credible and verifiable evidence that the issues of Abandonment, Decommissioning, and Relinquishment cost and proper compensation have been duly settled and filed before Nigerian Regulatory Authorities.

 

“We frown at this ploy to avoid paying up for decades of pollution and evading justice. We must stop this attempt to cause the laying-off of workers. This will create unemployment and corresponding restiveness.

“We doubt the sincerity of purpose expressed by SPDC: though we agree that the business in the petroleum industry remains profitable, we question the reasons for divesting some of their assets in Nigeria. A Look at what is being divested will notice old, crude theft high-risk oil assets, and unprofitable assets that in the not-too-distant future will be considered “stranded assets”. A critical feature of potentially stranded assets is not who owns them now but who can be persuaded to buy them now, and the new owner holds full responsibility for the liabilities of the former.
“The bottom line of our position is that the Civil Society Community says no to this Divestment Deal, as currently being pursued by SHELL, and hereby issues a firm warning that any attempt to ignore our stated positions and conditions, and to proceed in the execution of the Divestment Deal without satisfying the interest of the Nigerian People shall be met with stiff resistance and nationwide protests, with occupation of all SHELL Offices and that of all involved Parties indefinitely. THIS MATTER DIRECTLY AFFECTS OUR ECONOMY, HENCE, THE WELL-BEING OF THE PEOPLE.”

 

 

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