This Day (Lagos)

19 July 2012

Nigeria: Shell to Challenge U.S.$5 Billion Fine On Bonga Spill

Shell Nigeria Exploration and Production Company (SNEPCo) has said it would challenge any attempt by the Federal Government to impose penalty on it for last December's oil spill at the deep offshore field, Bonga.

SNEPCo operates the 225,000 barrels per day deepwater field as a contractor for the Nigerian National Petroleum Corporation (NNPC), under a Production Sharing Contract (PSC) arrangement.

In a statement Wednesday, the Managing Director of SNEPCo, Mr. Chike Onyejekwe, said some parties alleged that oil from the Bonga spill impacted communities, the shoreline, rivers and creeks.

He however stated that the spill that impacted on the communities and the creeks did not come from Bonga but from third party facilities.

Onyejekwe further stated that at the last week's hearing before the House of Representatives Committee on Environment, the National Oil Spill Detection and Remediation Agency (NOSDRA) also "confirmed that its analysis did not show any significant agreement between the fingerprint values from Bonga oil samples and those from the communities".

"This is consistent with our statement at the time of the incident that it was oil from a third party spill that impacted some parts of the shoreline despite SNEPCo's efforts to tackle it," he said.

Onyejekwe said SNEPCo would challenge any attempt to impose such a penalty, adding that there is no legal basis for such fine.

"We deeply regret that this incident took place, but as a responsible operator and corporate citizen we responded to it professionally and effectively and that everything we did was in cooperation with the authorities and in compliance with the regulations. Also, we cleaned up a third party spill that impacted the shoreline," he added.

He said the company would continue to respond and review all claims received in respect of the spill.

At a hearing in Abuja on July 16, 2012, on the spill before the House of Representatives Committee on Environment, NOSDRA had indicated that they would recommend "an administrative fine" to government because of the incident.

But Shell said it responded professionally and diligently to the incident and worked at all times alongside and with the support of relevant authorities, including NOSDRA.

The Bonga leak occurred in a flexible export line linking the Floating Production Storage and Offtake Vessel (FPSO) to the export tanker.

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