The Nigerian government is negotiating with the local population to recommence oil production in areas affected by environmental damageThis comes as Shell sold its onshore operation to a collection of local companies for $2.4 billion, as confirmed by Nigeria’s special assistant to the president on energy.The move puts an end to the London-based oil giant’s almost 100-year history of operating in the onshore Niger Delta
Henzodaily.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
Following the sale of onshore operations in Nigeria by oil giant Shell, the Nigerian government is negotiating with local people to resume oil production in an area that has already seen environmental harm.
FG identified a possible restart of oil production in the Ogoniland region of southern Nigeria. Photo Credit: FG, Contributor
Source: Getty Images
Recently, Olu Verheijen, Nigeria’s special advisor to the president on energy, confirmed Shell’s $2.4 billion sale of its onshore business to a group of local companies.
AP news reported that the development ends the London-based energy giant’s nearly century-long operations in the onshore Niger Delta region, where it has long been accused of environmental pollution.
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FG consider restarting oil production in the region
To boost its foreign exchange earnings, government officials have identified a possible restart of oil production in the Ogoniland region of southern Nigeria, where Shell halted operations in 1993 due to violent protests over claims of widespread environmental damage and human rights abuses.
“The broad consensus in Ogoni is in favor of restarting production,” said Ledum Mitee, a veteran environmental activist and former president of the Movement for the Survival of Ogoni People.
ExxonMobil, Eni, Equinor, TotalEnergies, and now Shell are among the Western oil corporations pulling out of Nigeria.
In the Delta region of the West African country, where oil spills have contaminated rivers and crops and increased tensions in an area plagued by years of militant warfare, they are primarily relocating offshore and minimizing their exposure.
After communities and activist organizations, such as Amnesty International and the Dutch non-profit Centre for Research on Multinational Corporations (SOMO), protested and demanded that Shell clean up first, the sale of Shell was postponed.
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The Nigerian Upstream Petroleum Regulatory Commission signed an agreement with Shell and the new owners, Renaissance Africa Energy Company, but the terms of that agreement are not publicly available. Isaac Botti of Social Action, a Nigerian group that coordinated protests against Shell’s sale, said his group had asked for the terms of the agreement.
Shell previously told AP that the transaction was designed to preserve the company’s role to “conduct any remediation as operator of the joint venture where spills may have occurred in the past from the joint venture’s operations.”
Environmental damage
High concentrations of heavy metals and chemical compounds from crude oil have been discovered by scientists in the delta, where the sector significantly contributes to Nigeria’s economic growth.
According to U.N. records obtained by AP, a cleanup effort in Ogoniland that was primarily sponsored by Shell and recommended by the United Nations Environment Programme is mainly mishandled.
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FG Threatens to Revoke Licenses
Henzodaily.ng reported that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has cautioned that it will deny export permits for crude oil cargoes meant for domestic refining if oil firms do not fulfil their domestic crude obligations.
The commission’s chief executive, Gbenga Komolafe, stated this in a statement on Monday, February 3, 2025, saying that any changes to cargoes meant for local refining must receive immediate approval from the NUPRC.
According to the letter dated February 2, 2025, to oil exploration and production companies and their equity partners, the NUPRC’s boss said that diverting crude meant for local refineries negates the law.
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Source: Henzodaily.ng