Court battle led to US$84M settlement after Oil Company offered US$6000 to Nigerian community

Apr 07, 2022 News

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Kaieteur News – A three year court battle between Dutch oil giant, Shell and a Nigerian fishing community had led to a US$84M oil spill settlement, instead of the US$6000 the oil giant had offered the community.

The multi-million settlement for the oil spills was paid to approximately 15,600 Nigerian fishermen and their community. It was reported that the spills devastated the environment surrounding the community of Bodo, in Gokana Local Government Area, Rivers State, Nigeria.
According to reports, in 2008 and 2009, a 55-year-old pipeline owned by Shell ruptured twice and resulted in 600,000 barrels of oil being spilled into the surrounding creeks.
In the aftermath of the oil disasters, Shell had offered to pay the community US$6000. As such the community sought legal representation from lawyers in London, where Shell headquarters is located.
Following a three year legal battle in the London High Court, the oil giant agreed to settle the matter. Instead of the entire community only receiving the US$6000 that the oil company had offered – the community members that were directly affected by the spills received US$3000 each. The total sum of the US$84M settlement was split into two. Some went to the affected fishermen and the remainder went to the community.
Following the announcement of the settlement the lawyer representing the claimants, Martyn Day from Leigh Day, was reported in the media saying, “Whilst we are delighted for our clients, and pleased that Shell has done the decent thing, I have to say that it is deeply disappointing that Shell took six years to take this case seriously and to recognise the true extent of the damage these spills caused to the environment and to those who rely on it for their livelihood….”
Moreover, Chief Sylvester Kogbara, Chairman of the Bodo Council of Chiefs and Elders, had said, “For now, the Bodo community is very happy that this case has been finally laid to rest. The hope is that this will forge a good relationship with Shell for the future, not only with the Bodo people but with all the Niger Delta communities that have been impacted in the same way as us.”
Kaieteur News reported recently that after two years of protest from citizens for full liability insurance coverage from oil giant, ExxonMobil in the unfortunate event of an oil spill in the country’s waters, Vice President Bharrat Jagdeo has finally come on record to assure that his administration is now working with the parent company to secure such guarantee. Jagdeo made the revelation last Thursday evening, during an interview with the Department of Public Information.
Since the startup of its oil operations in December 2019, ExxonMobil has evaded demands to provide insurance coverage, and instead tied its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) to provide this guarantee. It has been argued however that EEPGL, being a fairly new company, with assets worth only about US$5 billion, it would not be able to effectively cover all costs associated with an oil spill in Guyana, should such an adverse event occur.
So far, three of the oil company’s operations, Liza One, Liza Two and Payara have been granted approval, without guarantees in place from the parent company. With approval for its fourth project -the Yellowtail development – in the making, Jagdeo has made it clear that a separate document will be issued to Exxon, which ensures a guarantee is secured, should an oil spill occur.
He said, “…Yellowtail will be stronger than any (Permit) they (the former government) have issued and separately, not part of the permitting process for Yellowtail, but separately, we are working with the companies to secure a parent guarantee that will cover the entire Stabroek Block. Not Liza 1, Liza 2, Payara or Yellowtail, but the entire Stabroek Block, but that is a separate issue.”
The Vice President did not disclose figures, or further details regarding the guarantee his government is now looking to secure from ExxonMobil; more than two years post first-oil. Jagdeo was keen to note during his interview, however, that the former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams had merely thought of or “had something” up his sleeves while at the organization, but it is the PPP that is ensuring it is done.

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