Leadership (Abuja)

Nigeria: Claimants Reject Shell's U.S.$51 Million Offer Over Nigeria Oil Spills

Oil giant, Royal Dutch Shell is ready to pay up to $51 million in compensation for two oil spills in Bodo, Nigeria in 2008, but the lawyer representing the claimants have rejected Shell's offer.

Around 15,000 residents of the Bodo community in the Niger Delta represented by law firm, Leigh Day, appealed in 2011 to a London court for more than 300 million pounds in compensation.

The lawyers have said Shell may face a far bigger pay out after a London court ruled it could be liable for damage.

According to the claimants, the two spills resulted in the leakage of 500,000 barrels of oil but Shell estimated the volume at around 4,000 barrels.

In a preliminary hearing ahead of a trial which will take place in May 2015, the London high court ruled that Shell's Nigerian subsidiary could be liable if it were proven that it did not take reasonable steps to protect and maintain the pipeline from thefts which have plagued oil infrastructure in Nigeria, Reuters report.

"Short of a policing or military or paramilitary defense of the pipeline, it is my judgement that the protection requirement involves a general shielding and caring obligation," the judge said in a ruling.

Leigh Day argued that under the Nigerian Oil Pipelines Act, anyone who suffered from an oil spill can claim compensation if they can show a company was guilty of neglect in failing to "protect, maintain or repair" its pipeline.

"Shell has consistently sought to underestimate the damage whilst paying only lip service to an apology. These spills, which are some of the largest oil spills in history, have devastated a community of many thousands of people and ravaged the environment," Martyn Day said in a statement.

"The offer of 30 million pounds has been offered before and has been flatly refused by our clients who found it insulting and derisory, nothing has changed this view," Day added.

Shell is urging the claimants to reach a settlement before the May trial that is expected to last three months.

"From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo," managing director of the Shell Petroleum Development Company of Nigeria (SPDC), Mutiu Sunmonu, said in a statement to Reuters. "We hope the community will now direct their UK legal representatives to stop wasting even more time pursuing enormously exaggerated claims and consider sensible and fair compensation offers."

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InFocus

Nigeria Group Rejects Shell's Spill Payout

Shell barrell

Oil giant, Royal Dutch Shell is ready to pay up to U.S.$51 million in compensation for two oil spills in Bodo, Nigeria in 2008, but the lawyer representing the claimants has ... Read more »