House Fines Shell $3.6 Billion Over Bonga Spill

ShellThe House of Representatives Committee on Environment has directed Shell Nigeria Exploration Company to pay the sum of 3.6 billion dollars, which is about N604 billion naira as damages for the Bonga oil spill caused by its equipment failure.

The Chairman of the Committee, Uche Ekwunife, gave the directive during an investigative public hearing on the Bonga crude oil spill, which occurred on the December 20, 2011.

“Since all efforts by this committee were tactfully rebuffed by SNEPCO, (it) has decided to adopt the damage assessment report submitted by NOSDRA as the lead agency in all oil spill management,” Ekwunife said.

The breakdown of the independent value analysis adopted by the committee indicated that Shell is to pay 63.6 billion naira for direct losses, which are irreversible damages, another 103.192 billion naira for loss of income, 85 billion naira for provision of water, while 27.4billion naira is for forestry.

For the indirect losses, the oil company is to pay 14.35 billion naira for health hazards; eight million naira for injurious affection and 302.4 billion naira for punitive damage.

The House reached the decision based on the report of the National Oil Spill Detection and Response Agency (NOSDRA), which previously recommended a fine of $5 billion.

NOSDRA estimated that around 40,000 barrels were spilled when a tanker was loading crude at the offshore platform operated by Shell’s subsidiary SNEPCO.

NOSDRA has previously said the spill had hurt locals in the area who rely on fishing for their livelihoods as the slick covered an area of around 950 square km.

 

Shell is one of Nigeria’s oldest energy companies.

Shell companies in Nigeria produce oil and gas from land and swamps in the Niger Delta and from deep-water reserves some 120 kilometres off the coast.

Shell also operate Nigeria’s largest liquefied natural gas (LNG) plant, which exports all over the world.

Rights Activists Want Shell To Pay Compensation Over Bonga Spill

BongaEnvironmental rights activists, led by Chima Williams, have asked the Federal Government to compel Shell Petroleum Development Company- SPDC – to pay compensation to communities and clean up the waters affected by the 2011 Bonga Spill along the Ondo, Delta, Bayelsa, Rivers and Akwa Ibom states.

Addressing a news conference on Thursday, the group accused Shell of ignoring government’s earlier directives to pay compensation and clean up communities affected by the spill.

Eight months after the Federal Government directed shell to pay 11.5 million dollars as compensation in February, community representatives have said that Shell has neither cleaned up the affected areas nor paid the compensations.

Bonga Oil Spill: Federal Government Fines Shell N1.84 Trillion

The Nigerian Maritime Administration and Safety Agency, (NIMASA), and the National Oil Spill Response and Emergency Agency, (NOSREA), have ordered Shell to pay N1.84 trillion, as fines and compensation for the 2011 Bonga oil spill incident.

The Director General of NIMASA, Mr. Patrick Akpobolokemi told a public hearing organised by the House of Representatives Committee on Environment, that the Maritime Agency calculated a total of $6.5 billion, about N1.04 trillion, as compensation to be paid to the communities affected by the spill.

The Director General of NOSREA, Mr. Peter Idabo, also said the agency fined Shell $5billion, which is about N800 billion, for the oil spill incident.

The NIMASA boss alleged that Shell tried as much as possible to frustrate the agency’s moves to get to the site of the spill, adding that the agency had to step in immediately after the spill by providing some stop gap measures such as relief materials to some of the communities.

UPDATE: Bonga Oil Spill Contained, but Shell Struggles With Third Party Spills

Bonga Oil Spill

To prove it to the press and the Nigerian public, the company flew a group of international and Nigerian Journalists to the site of the spill, 120km off the Nigerian coast “to see for themselves how the oil that leaked from SNEPCo’s Bonga facility has largely dispersed”.

Shell said in a recent statement that it was already hard at work using dispersants to break up the oil and clean up the spill and said it “will continue to monitor the area, including using a radar satellite, and take appropriate steps to disperse any further persistent oil sheens”.

The company is still investigating how the spill of less than 40,000 barrels of oil – the equivalent of 1.68 million gallons – had occurred.

A manager of the Bonga oilfields, Cliff Pain, told the press that the spill had occurred a week ago during a routine operation transferring oil from Bonga’s floating production storage and off-take (FPSO) vessel to an oil tanker.

Pain said there had been a break in a flexible line about 360m out from the FPSO vessel transferring oil to waiting tankers, but confidently assured “we can undeniably say we traced our oil… and stopped it.”

In addition to seeing how the oil from Bonga has largely dispersed, the journalists were taken by helicopter to see the oilfield, which is controlled from a large ship not a stationary rig – and sits about 120km off Nigeria’s coast.

Shell Nigeria’s Chair Mutiu Sonmonu said the limited spill, weather and open ocean helped in containing the spill, however he said new spills from different sources have hampered Shell’s clean up.

In the statement released by Shell, Sonmonu said: “It’s important for the media, and the public, to see not only the results of our successful efforts to tackle the leak from Bonga, but also how third party activity has made the operation more challenging.

Channels Television energy correspondent Olu Phillips, who was on the site said the company, using satellite imagery, was able to differentiate between oil from their Bonga facility and oil from other sources. However, Phillips added that they were cleaning up the spill anyway.

Sonmonu said in a statement that “as a prudent corporate citizen, SNEPCo will tackle all the oil its teams can see offshore or which has come onshore in this area, including oil spilled by third parties.”

He added that “all necessary measures will be taken to protect the coastline, wildlife and the communities that live there, and where necessary to clean onshore areas, stating that Shell did not believe “any of the oil from Bonga has reached the shore.”

Bonga Oil Field Spillage Under Control

Bonga Oil Spill

The Nigerian Navy is reporting that the oil spillage at the Bonga Oil Field, about 65 nautical miles off the nation’s coast is now being brought under control.

Head of the Navy base in Warri, Delta state, Commodore Stephen Kor told journalist that the Navy assisted officials of the National Oil Spill Dictation and Response Agency (NOSDRA) in getting to the oil field to ascertain the cause of the spill

Bonga Oil Spill:Senate Cmttee’ urges Shell to halt oil spill

Bonga Oil Spill

At a press conference in Abuja, Chairman Senate Committee on Environment; Senator Bukola Saraki said information reaching the committee suggests that this spill has released over thirty thousand barrels of oil off the Nigerian coast.

Senator Saraki said the committee has heard from Shell on what actions they have taken to contain the crisis but said the committee is concerned that the Nigerian Oil Spill Detection Regulatory Agency (NOSDRA) lacks the necessary equipment to navigate the terrain where most of the spill took place.

He said NOSDRA has had to rely on the benevolence of Shell to provide them with equipment and logistics to help contain the crisis.

He assured Nigerians that the Senate Committee on Environment is closely monitoring the situation as it unfolds.