Royal Dutch Shell plc (ADR) (NYSE:RDS.A) alleged to owe Nigeria as much as $3.96 billion in oil spill fines.
Non-Binding Decision
According to a Reuters’ article, Nigeria’s parliament, the National Assembly, said that Shell is liable to pay as much as $3.96 billion for a previous oil spill. The announcement was made yesterday and concerned with the 2011 oilfield spill that occurred at the Bonga offshore. The parliament’s claim was made as part of the evaluation of the environmental damages project.
The decision is, however, until now non-binding, on the pretext that the parliament does not the authority to impose fines, but only to provide suggestions to the Government. The decision has been finalized after several years’ assessment of the matter.
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Initial Evaluations
Since 2011, when the incident took place, many Nigerian agencies have been involved with the matter. They have been evaluating the extent of damage so as to impose equivalent and justifiable fine on the company. According to initial evaluations, Shell could have caused damages of as much as $11.5 billion. After further assessments, the National Oil Spill Detection and Response Agency (NOSDRA) had announced a final figure of $5 billion. This has however been reduced to the present $3.96 billion, which Shell is due to pay.
In this context, Shell had previously announced that it had assumed complete responsibility for the oil spill and had taken the necessary action. The company claimed that it had cleared the area. However, it preferred to remain silent on the most speculations and allegations.
According to NOSDRA’s findings, Shell is responsible for oil spill from as many as 40,000 barrels. The incident had occurred as SNEPCO, Shell’s subsidiary, was loading crude at the Bonga offshore from a tanker. At the time, the agency pointed, that the field had an output of around 200,000 barrels a day. The agency claims that the oil spill had affected a total area of approximately 950 sq. km. around the shore.
