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Shell Oil: Divestment from OML 11 & serious matters arising


The Nigerian subsidiary of the Anglo-Dutch oil giant, Shell Petroleum Development Company of Nigeria (SPDC) was supposed to be the operator of the Oil Mining Lease (OML 11) covering the Ogoni area of Rivers state. The company has 98 oil wells in about seven oilfields in Ogoniland and five flow stations in Bodo West, Bomu, Yorla, Korokoro and Ebubu before its expulsion from the area in 1993. Daily output from the area, according to Shell statistics, was at 28, 000 barrels per day before the shut-in in 1993 after the killing of Ken Saro Wiwa et al.

It would be recalled that the federal government in what seemed like the ultimate solution to the almost two decades of anti-Shell protest by the Ogoni people had decided that Shell would divest all its operations in Ogoniland for a new oil firm to come in. And as said, the company’s operating license in Ogoniland would be revoked and new operator (s) would take over the company’s oilfields and facilities in the area. 

The decision became necessary since there has been a sustained enmity and total loss of confidence between the Ogoni people and Shell. The government believed the best solution would be to allow another operator acceptable to the Ogonis to take over exploitation activities in the area as nobody was gaining from the conflict and stalemate.

Now, in what could best be described as a warning to companies that have indicated interests in taking over the Shell assets in Oil Mining Lease (OML) 11 with a view to re-start oil operations in the area, the apex platform of the Ogoni people, the Movement for the Survival of Ogoni People (MOSOP) in its statement dated 23rd October 2015 and signed by Bari-ara Kpalap, Media/Public Affairs Advisor, expressed disappointment at reports regarding attempts by some “self-centred and faceless elements dubiously seeking divestment of OML 11, which accommodates the Ogoni oil concession, to their corporation.”

In a clear warning, MOSOP said “we would like to make it very clear that Ogoni will resist all attempts to sell or buy the Ogoni oil block or resumption of oil extraction through the back door without the involvement of the people.”

As said, “Coming at a time when the Ogoni people are sustaining efforts at urgent implementation of comprehensive remediation and restoration of the hydrocarbon ruined Ogoni environment before any other matter relating thereto may be negotiated, we consider the approach condemnable, provocative and assaulting the collective interest of our people; and unfortunate. We suspect that enemies of Ogoni that are averse to the implementation of the Ogoni clean-up project may be at work using some local Ogoni chiefs, elites and politicians that mortgaged their conscience for pecuniary benefits to cause crisis that would be unsuitable to carrying out the exercise.

“Insofar as we are concerned, the attempt at this time is not only insensitive but also betrayal of our people. We insist that the issue of oil including extraction resumption cannot be a matter to be approached secretly and of a select few but would genuinely have the full participation of all Ogoni citizens.

“We would thus warn this faceless group and similar interests to immediately halt the pursuit as the issue of divestment of OML 11 and resumption of oil production in the area is not on the Ogoni card now but clean-up of the degraded Ogoni environment.

“We would as well warn Shell that it would be held responsible for whatever crisis that may rock Ogoniland if it further entertains the lures of these elements and their external masterminds; we are keenly watching. This is more so as Shell may not be innocent of the current development in view of her failure to distance itself from recent vexatious blackmails against Ogoni championed by its External Relations General Manager, Igo Weli.

“It is our position that re-commencement of oil production in Ogoniland in the face of the UNEP report on the community, which had validated our fears, would undoubtedly compound our woes if the environment is not first restored. We are of the firm believe that with the acknowledged degree of contamination, the Ogoni environment, we are afraid, would be unable to stand re-start of mining of oil and gas in the area. Oil production as we all know, cannot be carried out without pollution hence it will be double tragedy if another contamination is inflicted on an earlier one, which is yet to be remedied.

Without supporting MOSOP threats on the matter, no doubt, there are so many things that are not very clear in the present rush to acquire Shell’s interest in OML 11 towards restarting of oil exploration and production in the controversial Ogoni area. There are so many gray areas or rather hidden issues in the entire asset divestment and acquisition scheme which if not properly addressed, would introduce serious complications in the UNEP- mediated peace process and the proposed clean -up and remediation programme in Ogoniland.

First, if the federal government has ordered Shell to relinquish its operational rights in Ogoni oil fields to a new operator, how is the government going to get Shell to pay its counterpart funding for the clean-up and remediation exercise as proposed by the United Nations Environmental Programme for the Ogoni area?

Secondly, is the new operator going to inherit only the assets of Shell in the oil concession without the accompanying liabilities or will inherit both? Is it not better for the federal government to allow the UNEP-proposed clean-up and remediation exercise of the oil spill devastated area to be completed before the talk of asset takeover by a new firm? The divesting Shell has serious obligation assigned to it in the exercise and if it is allow to hands-off the acreage now, the entire effort by both the federal government and UNEP at cleaning the massive oil spillage in the area would definitely run into a hitch.

Another serious issue borders on the choice of the new operator (s). The question now is: Which of the oil companies would be acceptable to the Ogoni people and whose definition of “acceptable” is going to be accepted across board without suspicion and unnecessary rancour?

Finally, who are the real Ogoni people- the few select elite group; the emerging middle level power brokers or the grassroot Ogonis?

The issue of the acceptable definition of the “Ogoni people” is very crucial because needless to say that many interest groups have sprung up in the area since the federal government and UNEP came in to sincerely resolve this almost two decades dispute between Shell and its host in the OML 11 area. And the emergence of these new groups whether well or evil-intended, it is only appropriate to carry everybody along in the ongoing reconciliation and reorganisation exercise if the peace and reconciliation between the federal government/Shell and the people is to be total. This may also help in the new era to avoid sabotage or opposition from certain quarters of Ogoni society.

These are very sensitive issues that need to be address even before a new entrant ventures into the area to avert a repeat of what led to the Shell crisis.

(Ifeanyi Izeze is an Abuja-based Consultant and can be reached on: iizeze@yahoo.com; 234-8033043009)

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