Royal Dutch Shell has raised an alarm over the continuing siege at a Nigerian facility by protesters, saying they could be putting their safety at risk.
Hundreds of protesters from the Kula and Belema communities in Nigeria’s restless southern Rivers state have occupied the plant since August 11 to press their demands for jobs and better living conditions.
“The illegal occupation of Belema Flow Station and Gas Plant in Rivers State has safety implications both for the people at the facilities and nearby communities,” the company’s Nigerian subsidiary, Shell Petroleum Development Company, said in a statement on Sunday.
It said it was “deeply concerned that unauthorised persons, including women and children, have been observed in close proximity to equipment that processes crude oil and gas without the protection of safety clothing.”
Shell said the occupation “exposes people at the plant to higher safety risks as anything could trigger a spill or fire with potentially serious consequences.”
The company said it had not been able to gain access to the plant since the seizure, and called on the protesters to leave.
The protesters also want Shell to shift the operation of the plant to a local company.
“We want Shell to hand over the operations of the flow station to Belema Oil Company because it appreciates our challenges and needs,” community leader Godson Egbelekro told AFP.
The plant transports crude oil to the Bonny Light export terminal, which has a production capacity of 225,000 barrels per day.
In 1993, Shell was forced to quit operation in Ogoniland because of community unrest, but the company still runs a network of pipelines in the area.
Nigeria, Africa’s biggest oil producer with some two million barrels per day, relies on the sector for 90 percent of foreign exchange earnings and 70 percent of government revenue.
The widow of Dr Barinem Kiobel, one of the nine Ogoni activists executed in 1995 by the General Sani Abacha-led military government, has filed a case against oil giant, Shell for alleged complicity in the execution of the activists.
Amnesty International said in a statement that the latest case in the Netherlands by Mrs Esther Kiobel revealed details of the alleged role Shell played in the executions.
According to the statement, Esther Kiobel has fought for justice for her husband for more than 20 years, alleging his unlawful arrest and detention, the violation of his personal integrity, the violation of his right to a fair trial and his right to life, and her own right to a family life.
“The executions of the Ogoni Nine shocked the world. Shell has been dodging accountability for its complicity in these deaths for more than twenty years but now, thanks to Esther Kiobel’s determination and bravery in taking on this corporate Goliath, the past is finally catching up with it,” Senior Director of Research at Amnesty International Audrey Gaughran, said.
“Today is a watershed moment in Esther Kiobel’s uphill battle for justice. Shell has to answer for the bloody footprints it left all over Ogoniland,” he added.
‘A Brutal Campaign’
Amnesty International also said the executions were the culmination of a brutal campaign by Nigeria’s military to silence the protests of the Movement for the Survival of the Ogoni People (MOSOP), led by Ken Saro-Wiwa.
According to the statement, MOSOP had claimed that others had grown rich on the oil that was pumped from under their soil, while pollution from spills and gas flaring had “led to the complete degradation of the Ogoni environment, turning their homeland into an ecological disaster.” In January 1993, MOSOP declared that Shell was no longer welcome to operate in Ogoniland.
In January 1993, MOSOP declared that Shell was no longer welcome to operate in Ogoniland.
The military authorities responded to the MOSOP protests with force, committing numerous serious human rights violations including killings, torture and rape.
“Shell encouraged the government to stop Ken Saro-Wiwa and MOSOP, knowing this was highly likely to result in human rights violations being committed against them. Shell had plenty of evidence that the Nigerian Military was responding to the Ogoniland protests with abuse,” said Audrey Gaughran.
“Just weeks before the men were arrested, the Chairperson of Shell Nigeria had met with then-President, General Sani Abacha, and raised “the problem of the Ogonis and Ken Saro-Wiwa”. This was not the first time Shell had engaged with military and security forces to frame the Ogoni protests as a “problem”. Shell also repeatedly reminded the authorities of the economic impacts of the MOSOP protests,” Amnesty International added.
Shell was however quoted to have denied all allegation insinuating its involvement in the killings.
“The allegations cited in your letter against Shell are false and without merit. Shell Nigeria did not collude with the military authorities to suppress community unrest and in no way encouraged or advocated any act of violence in Nigeria. We have always denied these allegations in the strongest possible terms.”
The Economic and Financial Crimes Commission (EFCC) has filed a three-count charge of conspiracy and corruption against two multinational oil firms, Shell and Eni, for their roles in the alleged Malabu $1.1 billion scandal.
Nine others were also charged along with the two multinational companies before an FCT High Court in Abuja on Thursday.
Those charged alongside Shell and Eni are a former Minister of Justice and Attorney General of the Federation, Mohammed Adoke, and a former Minister of Petroleum, Dan Etete, as well as a businessman Aliyu Abubakar.
In the first count of the charge, Shell Nigeria, Nigeria AGIP Exploration Ltd., Eni S.p.A, a former Director of SNEPCO, Ralph Wetzels, two Italians who are former directors in AGIP, Casula Roberto and Burrafato Sebastiano, Douzia Louya Etete popularly known as Dan Etete, Mohammed Adoke, Aliyu Abubakar and Malabu Oil & Gas Ltd. allegedly conspired sometime in 2011 to commit an offence of official corruption.
In the charge sheet signed by Jonson Ojogbane for the EFCC, the offence was said to be contrary to Section 26 of the Corrupt Practices and Other Related Offences Act of 2000 and punishable under Section 12 of the same act.
In the second charge, Dan Etete, Mohammed Adoke, Aliyu Abubakar and Malabu Oil & Gas were alleged to have corruptly received the sum of eight hundred and one (801) million dollars in respect of OPL 245 from Shell Nigeria, Nigeria Agip Exploration Ltd. and Eni S.p.A.
The new charges were said to be part of an international collaboration to ensure that all those who partook in the alleged $1.1 billion OPL 245 scandal were brought to justice.
The OPL 245 oil block is currently owned by the Nigerian Government after a temporary court order granted on the basis of an EFCC application.
Shell and Eni have since appealed the order asking that the block be returned to them.
The Shell Petroleum Development Company (SPDC) has relocated its Kolo Creek-Soku gas pipeline across Kolo River in Bayelsa from the river surface to the river bed.
A visit to the Kolo Creek Oilfield operated by SPDC shows that the gas pipeline is no longer located on the water surface across the creek.
Oil workers were seen refilling dug out sand from the creek.
SPDC had in October 2016 passed the gas pipeline above the surface of the Kolo River, hampering navigation by fishing canoes, transport boats amongst others in the channel.
The development had triggered resistance amongst environmentalists and residents affected by the blockade which compelled SPDC to remove the pipeline from the water surface and buried it under the riverbed.
Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), had in its advocacy urged SPDC to bury the pipeline to protect the economic interest of residents who used the creek as transport channel and fishing activities.
Reacting to the development, Head of Field Operations at ERA/FoEN, Mr Alagoa Morris, noted that it was a welcome development and applauded SPDC for taking steps to correct the anomaly.
“It is a positive outcome of our advocacy efforts and we commend SPDC for taking steps to come back to bury the pipeline under the river bed, it shows that we are partners to ensure that the oil industry is run in a sustainable manner.
“We always demand justice and fair play and preach the principle of ‘live and let live’, with the pipeline underneath the Kolo River, fishermen and community people who use the creek will operate while Shell carries on its business as well.
“We in the environmental rights movement are keen on complimenting and strengthening the efforts of the regulatory authorities. We are not trouble makers as some of the industry operators perceive us, we do not shout for nothing.
“When they do well we applaud and commend them, and this is a win-win situation for Shell and its host community. This action makes further protests which we planned unnecessary,” Morris said.
Also, an Environmental Scientist and development worker at Connected Development (CODE), Ms Benita Siloko, noted that she was worried about the adverse impact of crossing the pipeline on water surface when she noticed the pipeline in December 2016 during the Christmas holidays.
“I had observed the pipeline across the water surface and opted to take photographs because it looked abnormal for a channel where boats and canoes pass, I am pleasantly surprised that they have corrected the problem.
“Oil firms must understand that the welfare and economic interest of oil bearing communities count while executing their projects.
“As an environmentalist I feel happy at the development, and it shows that with the support provided by the civil society advocacy groups like ERA/FoEN our communities would be a better place to live in,” Siloko said.
Nigeria’s oil production showed further signs of strain on Thursday as intruders blocked access to Exxon Mobil’s terminal exporting in Qua Iboe, the country’s largest crude stream.
Exxon Mobil said that the terminal continued to operate even as the intruders blocked staff from gaining access from early morning hours.
The incident is the latest in a string of attacks and other problems at the oil infrastructure in Africa’s largest crude producer.
Militant activity in the oil-rich Niger Delta has taken out some 500,000 barrels per day of crude oil production from other companies in Nigeria, pushing oil output in Africa’s largest-producing nation to more than 22-year lows.
Nigeria’s oil production has fallen by almost 40 percent to 1.4 million barrels a day due to militant attacks on facilities in the Delta region, its oil minister said on Monday.
Emmanuel Ibe Kachikwu’s comments come amid a resurgence of militancy in the southern region which produces most of the crude oil that Nigeria relies on for around 70 percent of national income, and days after Britain’s foreign minister said local grievances need to be addressed.
Kachikwu said efforts would be made to engage with people in the area.
Nigerian oil output has been driven lower after attacks by a group calling itself the Niger Delta Avengers which says it wants a greater share of oil profits and independence for the swampy region where residents have long complained of poverty.
Attacks in the last few weeks have hit platforms belonging to Chevron and Shell.
“Because of the incessant attacks and disruption of production in the Niger Delta, as I talk to you now, we are now producing about 1.4 million barrels per day,” Kachikwu told the House of Representatives.
“We were at 2.2 million bpd but we have lost 800,000 barrels,” said Kachikwu, who was invited to address the lower house of parliament about the country’s oil sector.
The 2016 budget assumes oil production of 2.2 million barrels per day at $38 a barrel.
Nigeria has moved in army reinforcements to hunt the militants but British Foreign Minister Philip Hammond on Saturday said the government needed to the deal with the root causes of the conflict because a military confrontation could end in “disaster”.
Kachikwu echoed these sentiments when he told parliamentarians experience had shown that force alone tends not to solve problems.
“There are going to be robust engagements on what could have happened to the contract or relationship that used to exist between the Niger Delta and the Nigerian police that has suddenly resorted to sabotage,” said Kachikwu.
President Muhammadu Buhari has extended a multi-million dollar amnesty signed with militants in 2009 but upset them by ending generous pipeline protection contracts.
“We are trying to look at the amnesty and what has happened. Policing is key, security is key and throwing economic palliative to those sectors are also key,” added Kachikwu.
He said the government was “trying to create funding mechanisms for some private investments including funding mechanisms for some modular refineries” and “actually getting them involved in the security of the facilities”.
U.S. oil major, Exxon Mobil Corp, says it has suspended exports from Nigeria’s top crude stream.
The suspension has added to economic strains from renewed activities of militants in the Niger Delta region that have cut production to its lowest in decades.
Reuters quoted Exxon Mobil as saying on Friday that it had declared a force majeure – a suspension of deliveries because of events beyond its control – on Nigeria’s Qua Iboe crude oil grade BFO-QUA, and that a portion of production had been curtailed after a drilling rig damaged a pipeline.
Last week, Chevron’s platform in the Delta was attacked by militants.
The outages adds to production problems at two of the other largest crude streams, Bonny Light and Forcados, which have already taken Nigeria’s output to a 22-year low.
Royal Dutch Shell shut a major pipeline earlier this week and declared force majeure on Bonny Light crude exports on Wednesday, while an attack in February on a pipeline also caused it to shut the 250,000 barrels per day Forcados export terminal.
Nigeria’s oil production has fallen to 1.65 million barrels per day (bpd) due to militant attacks, Finance Minister Kemi Adeosun, said on Friday, from 2.2 million bpd.
According to Reuters calculations, if outages at Qua Iboe and other streams are prolonged, Nigerian output could fall to around 1.2 million bpd.
This would be the lowest output since 1970, according to BP’s statistical review.
Nigeria had been Africa’s largest crude exporter with its economy heavily reliant on oil up until this year, when rampant oil theft and corruption has kept production well below capacity.
As a result, Angola has overtaken Nigeria as the continent’s largest producer since March, according to OPEC figures.
The Managing Director, Nigeria Liquefied Natural Gas (LNG), Babs Omotowa, believes gas is the future of Nigeria and has emphasized the need for authorities to put more effort into developing the gas industry.
Mr Omotowa was on Channels Television’s Business Morning on Friday where he spoke about the business of liquefied natural gas and issues in Nigeria’s gas industry.
He admitted that indeed the crash in oil price has had a huge impact on gas prices because 70% of gas price is linked to brent and the implication is that when brent goes down, gas price goes down as well.
However, he noted that gas remains the future for Nigeria.
“Nigeria is in the top ten gas reserves in the world. There is no doubt that most energy experts will tell you that Nigeria is actually more a gas province. I think we still have over 200 years of gas available in Nigeria.
“Remember we have 180 tcf of gas today. Most of that were found by accident. We were looking for oil, we suddenly found gas. We haven’t really gone out aggressively to look for gas and that’s one of the areas we need to focus on as a country.
“How do we incentivise to bring the investments that are required to build this infrastructure?
“We need foreign and local investors to come up with this sort of investment and as a country we need to spend more time thinking about how we can bring in investment to grow the gas industry because gas really is the future, oil was our past.
“Gas can give us not only liquefied gas or domestic power but petrochemicals which gives you a lot of manufacturing capabilities.
He put the potential revenue from the gas industry at about three billion US dollars annually.
While stating that government has to look at incentives to encourage investors, he asked legislators to also look carefully into laws governing the sector and warned against frivolities that could become burdens to investors.
Issues In Nigeria’s Gas Industry
Speaking about the issues that have come up in the gas industry, Mr Omotowa said that they were being addressed as positive results are already being seen.
He highlighted the issues of regulatory uncertainties with the Petroleum Industry Bill (PIB), under-funding of the industry, infrastructure, security of facilities and long contract approval processes.
“I think in fairness with the current administration since President Buhari has been on seat and the Minister of State for Petroleum, a lot of effort has gone into trying to address these issues.
Mr Omotowa also debunked the belief that the pricing for gas does not favour the company when it has to supply domestically as stiff pricing makes local purchasing hard to come by, so rather it focuses more on exporting it.
He noted that the pricing for gas domestically is “at the right levels” considering the price of domestic gas in the US is lower than the price in Nigeria.
He explained, “Our problem is not the price but that this industry is faced with expenses and costs that are simply not comparative.
“When you think about what we have to spend on security, community development and regulatory government agencies trying to impose so much taxes and fees on us, it just raises the cost up and once these prices are raised up by all these input cost, then the price has to be high.”
Gas Master Plan
Mr Omotowa also explained the different aspects of the proposed Gas Master Plan which was expected to help create a much better business environment in the gas indutry.
First was the area of appropriate gas pricing which he believes has seen progress, as gas price has moved up significantly.
“You had aspects that had to do with trying to have domestic gas obligations for upstream companies. I think we’ve seen progress because I think we are producing a lot more gas to domestic now than we used to before.
“There are aspects to do with increasing the export activities with Brass LNG, OK LNG, and Train 7. I think we are a bit slow on that aspect.
“There have also been aspects to do with building petrochemical plants. Again, we haven’t made much progress in that front.
“So in totality, when you look at the gas master plan, I think in many areas there have been progress and in some areas I think we are still behind but it’s not to be unexpected, because it’s not a plan that was to be completed in a year.
“However, I think we are on the right track, I think with this current administration; the President, the Minister of State for Petroleum, we are really seeing much effort in the right direction.”
Shell petroleum Development Company of Nigeria says the sum of 42 billion US dollars was paid to the federal government as economic contribution to the joint venture partners from 2011 to 2015.
In its sustainability report 2015 released on Monday, the oil giant noted that government also received 4.95 billion dollars in 2015 as production entitlement, taxes, royalties and fees.
Meanwhile, the Bayelsa State government has sealed the Gbaran Ubie Oil and Gas production facility owned by Royal Dutch Shell on court orders.
A statement issued by the Executive Secretary of the state’s Physical Planning and Development Board, Boro Ige-Edaba, said that this is to enable the board to conduct environmental, health, technical integrity and safety checks at the facility.
Ship owners exporting Nigerian oil would have to sign a “Letter of Comfort” (LOC) to guarantee it is not stolen.
This is according to Royal Dutch Shell.
The Nigerian National Petroleum Corporation (NNPC) had in July, banned more than 100 tankers from Nigeria’s waters, citing a directive from President Muhammadu Buhari who wants to trace and recover sums of money allegedly stolen from the oil sector.
In September, the NNPC lifted the ban but asked ship owners to sign a Letter of Comfort to “Guarantee to Indemnify” against any illicit use of their vessel. This led some owners to reject pending bookings.
According to a statement by Shell, the company is putting its reputation on the table that warrants the cargo is not stolen and this should remove any concern ship owners have around bad title down the oil chain.
Traders say oil companies, trading houses and tanker owners were ensuring that actions taken by Nigeria to prevent oil theft did not affect the market