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Shell to pay $110million to end 30-year Nigeria oil spill case

© BloombergShell Nigeria oil
Abandoned fishing boats sit on the ground as crude oil pollution covers the shoreline of an estuary in B-Dere, Ogoni, Nigeria, on Saturday, Feb. 1, 2020.

Shell Nigeria has agreed to pay a community in the West African country more than $110million (£79.3m) to resolve a long-running dispute over an oil spill that occurred more than 50 years ago.

The Anglo-Dutch energy giant will pay the Ejama-Ebubu people 45.7 billion naira ($110.9 million) in compensation to put an end to a legal case that began in 1991, the community’s lawyer Lucius Nwosu said by phone. Shell approached a court in Abuja, Nigeria’s capital, on Wednesday to disclose the development, he said.

The payment “is for full and final satisfaction” of a court judgment issued against the company 11 years ago, a spokesman for Shell Nigeria said by email.

The origin of the community’s grievance against Shell dates back to a rupture in one of the firm’s pipelines in 1970. Shell said it maintains that the environmental damage was caused by “third parties” during a civil war that was raging at the time. While the joint venture that Shell operates “does not accept responsibility or liability for these spills, the affected sites in the Ebubu community were fully remediated,” the company said.

In 2010, a federal court ordered Shell to pay 17 billion naira to the community. The oil major unsuccessfully challenged the decision on multiple occasions, including most recently at the Supreme Court in November. In March 2020, a judge in a related court case said that, with interest accrued, Shell’s debt stood at nearly 183 billion naira by January 2019 – a valuation the company vehemently contested.

In February, Shell initiated arbitration proceedings against the Nigerian government at the World Bank’s International Centre for Settlement of Investment Disputes following its unsuccessful attempts to overturn the 2010 ruling. Shell didn’t say in its statement if it will withdraw the claim.

Shell will pay the agreed sum within 21 days, Nwosu said.

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