CEM REPORT | A court of appeal in Owerri has stopped Shell Plc from selling any assets in Nigeria ahead of a decision on the company’s appeal suit over $2 billion penalties from alleged oil spills.
According to Reuters’ report, Monday citing a copy of the court ruling issued on March 11, Shell is also ordered to deposit the money in an account controlled by the court within two working days.
A panel of three judges said Shell, acting through its agents or subsidiaries was restrained from “selling, allocating, vandalising or disposing off any of its assets/properties …” pending the determination of the appeal,
Shell’s appeal hearing is set to begin on May 5.
Reuters wrote that a spokesperson for Shell’s Nigeria unit said the company would immediately appeal the decision.
“We are disappointed at this outcome. We have a strong belief in the merit of our case and will take immediate steps under the law to appeal and stay the execution of the decision until the appeal is determined,” the spokesperson said.
A Federal High Court in November 2020 ordered Shell to pay 800 billion naira ($1.95 billon) to 88 communities of Egbalor Ebubu in Rivers state, who had accused the company of an oil spill that damaged their farms and waterways.
Shell denied involvement in activities that caused the spill, then appealed the verdict.
While the appeal is still awaiting hearing, Shell started talks with the Nigerian government last year about selling its stake in the West African country’s onshore fields, where it has been active since the 1930s, as part of a global drive to reduce its carbon emissions.
Sale of Shell onshore oilfields could fetch up to $3 billion, three sources involved in the process told Reuters.
The Anglo-Dutch company has stakes in 19 oil mining leases in Nigeria’s onshore oil and gas joint venture (SPDC), which the industry and banking sources said were valued at $2 billion to $3 billion.
Shell operates SPDC (Shell Petroleum Development Company of Nigeria) and holds a 30% stake in the venture. The state’s Nigerian National Petroleum Corporation (NNPC) holds 55%, TotalEnergies (TTEF.PA) has 10% and ENI 5%.
At least five Nigerian oil and gas companies have indicated interest in acquiring the assets. These include Seplat Energy (SEPLAT.LG), Sahara Group, Famfa Oil, Troilus Investments Limited and Nigeria Delta Exploration and Production (NDEP).
Any buyer of Shell’s assets will also need to show it can deal with future damage to the oil infrastructure which has ravaged Nigeria’s Delta in recent years, a source said
Shell, the most significant international oil major operating in Nigeria, has faced a string of court cases in the past over oil spills.
Last year, Shell agreed to pay a Nigerian community $111.68 million to settle a case over an oil spill that took place more than 50 years ago.