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Shell suspends sale of onshore Oil assets in Nigeria

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Shell Oil holds on onshore assets sale

The world’s largest oil company, Shell, announced that it had put on hold plans to sell its onshore oil assets in Nigeria in accordance with a Supreme Court decision requiring it to wait for the resolution of an appeal involving an oil spill in 2019.

The Shell Petroleum Development Corporation of Nigeria Ltd. (SPDC) appeal in this case will be heard by the Nigerian Supreme Court, the London-based company said in a statement.

Shell will not move on with the divestiture of its SPDC interest until the outcome of SPDC’s appeal, it continued.

The Niger Delta community was awarded $1.95 billion in compensation for the spill, and on June 16, Nigeria’s Supreme Court affirmed a previous court order prohibiting Shell from selling its assets in Nigeria until the dispute over that decision is settled.

Shell, which owns and controls SPDC, wants to sell its 55% part as the joint venture struggles with hundreds of leaks, the most of which are the result of theft.

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The business has already been involved in a number of legal battles involving oil spills.

Shell said, it remains its “strategic intent” to sell its SPDC stake while continuing to invest in offshore oil and gas as well as onshore gas production.

“However, such investment will require a stable and competitive investment climate,” Shell said.

Osagie Okunbor, managing director of SPDC and chair of Shell’s country operations, stated in a separate statement that the joint venture would uphold the Supreme Court’s directive to maintain the status quo.

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In Rivers State, 88 villages received compensation for an oil spill that they claimed Shell was to blame for and that ruined their agriculture and waterways. The spill’s origin is denied by Shell.

The neighbourhood asked for and received a court order preventing Shell from selling its assets. Additionally, the $1.95 billion was ordered to be placed by the firm into a designated account by the court until the legal matter was resolved.

 

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