Nigerian regulators are demanding Royal Dutch Shell pays $5 billion in fines for environmental damage caused by last year’s oil spill at its offshore Bonga field. Shell says there is no legal basis for the fine.

The fine would be the largest Shell has ever received in Nigeria and is about $125,000 for each barrel of oil split in the Bonga field, about 120 kilometers off the coast.

The spill which was probably the worst in the area for a decade, occurred on December 20, 2011 and according to estimates less than 40,000 barrels, or 1.68 million gallons were released.

"We do not believe there is any basis in law for such a fine. Neither do we believe that SNEPCo (Shell Nigeria Exploration and Production Co) has committed any infraction of Nigerian law to warrant such a fine," said the oil company.

By contrast, BP is facing a maximum fine of $4,300 per barrel in the US following the Gulf of Mexico spill, when oil had been gushing out of the well into the water at a rate of 10,000 to 30,000 barrels a day for almost a year, resulting in a an estimated leak of 206 million gallons.

The National Oil Spill Detection and Response Agency (NOSDRA) said the Nigerian spill was caused by a failure in Shell's export pipe, saying that the spilled oil badly affected approximately 950 square kilometers of water surface and a great number of sensitive environmental resources.

"It has a direct social impact on the livelihood of people in the river areas whose primary occupation is fishing," the NOSDRA agency maintained.

Shell said last December's an oil spill occurred when a tanker was loading oil, leading to the complete shutdown of the company's 200,000 barrel per day production at the Bonga facility.

Bonga accounts for around 10% of monthly oil flows from OPEC member Nigeria, the continent's largest exporter of crude oil. Production restarted in January.

Oil spills are often onshore in Nigeria with many caused by sabotage or thieves tapping into easily accessible pipelines. Several communities have taken Shell to court over a failure to clean up spills.

A United National Environment Programme report last year said Shell was not doing enough to clean up spills and maintenance of the infrastructure was inadequate.

Okija_juju: Huh?!

ifihearam: Who receives the money??

afam4eva: Shell has the power to do anything because they've paid politicians the money bthat's supposed to accrue to the affected communities.

debosky: Is there a legal basis for the fine? How did NOSDRA arrive at that figure? Or are they disputing the quantity of oil spilled as reported by Shell?

In other countries there are set out penalties for each barrel of oil spilled, along with further penalties if gross negligence is established as a cause of the spill. Furthermore, any damages that occurred as a result of the spill would also be quantified in order to seek financial compensation.

It would be useful to understand the basis for the $5bn fine - simply mentioning a big figure isn't good enough.

This is what was said in the National Assembly:

The Director-General of the National Oil Spill Detection and Response Agency (NOSDRA), Dr Peter Idabor, said while appearing before the House of Representatives Committee on Environment last week that the amount represented “administrative penalty” prompted by the environmental impact of large quantity of the oil spilled from Shell’s Bonga facility.


Idabor said the regulatory agency was guided in reaching that decision in line with international best practices in the oil and gas industry, saying it was in tandem with what was obtainable in oil producing countries like as Venezuela, Brazil and the United States of America (USA).

Administrative penalty of $5bn for a 40,000 bbl spill? Like I said, the basis for such a claim would be a good starting point.

gbengalite: By contrast, BP is facing a maximum fine of $4,300 per barrel in the US following the Gulf of Mexico spill, when oil had been gushing out of the well into the water at a rate of 10,000 to 30,000 barrels a day for almost a year, resulting in a an estimated leak of 206 million gallons.


This is just last week..... So i believe we too should take a precisive step

2sexy:

stupid company.... would they try this in their own country?

texazzpete:

Did BP not record a spill off the coast of the US?

You talk as if the spill was deliberate. Smh

all4naija: We are talking of the poor practices. Not spillage due to ring explosion. Don't just go there to compare the bad environmental practices indulge by Shell in Nigeria to BP mishap/accident in the Gulf of Mexico. The air pollution in the Niger-delta is enough testament to that.

There are no good records of cleanup done by Shell after spillages.

thomasjohn:

hear urself, who will spend money to get crude out of the ground so he can just discharge it into d environment?
Alot of ppl hav so much hatred for IOCs, nd i dnt know why, same ppl keep on praising our clueless govt.
u think IOCs ar ran like ur clueless govt?

thomasjohn:

hear urself, who will spend money to get crude out of the ground so he can just discharge it into d environment?
Alot of ppl hav so much hatred for IOCs, nd i dnt know why, same ppl keep on praising our clueless govt.
u think IOCs ar ran like ur clueless govt?

all4naija: What's in poor practices you don't understand? You are indeed very short-sighted!

thomasjohn:

u ar d one who is short sighted, how do leaks happen, they happen as a result of damage of pipelines, will a company go and deliberately damage their pipeline? NO.

If you car breaks down will i say its cos of ur poor practice that it breaks down? No, it could be due too several reasons,which might be beyond your control.