By Ephraim Matthew
When people go to court, there is the assumption that one party will win while the other one will lose.
That is where Shell and the Ejama-Ebubu community in Eleme local government area of Rivers state have now found themselves. After years of legal skirmishes, a decisive verdict seems to have been reached with the Supreme Court’s unanimous decision of Friday, November 27, 2020. Delivered by Justice Centus Nwese, the Apex court noted that the appeal filed by the oil company was “frivolous” and “lacked merit” and so dismissed it for being “incompetent and lacking in merit”.
By that ruling, the Supreme Court affirmed the sale and purchase of OML 11 and the contiguous Kidney Island which serves as operations and logistics support base for OML 11 and other parties. The purchase of Shell’s equity OML 11 was announced in September 2019 ago by Governor Nyesom Wike following a bid of $150m which purportedly made the state government owner of 45% equity in OML 11 and Kidney Island.
OML 11 is seen as potentially, the most prolific and oil and gas assets in Nigeria with an estimated daily production of 250,000 BPD with all 33 wells producing.
How did Shell get to this point and what does it mean for the Anglo-Dutch giant and other global brands willing to invest in Nigeria and on a larger scale, what does it mean for Foreign Direct Investment and this government’s mantra of the ease of doing business?
The beginning of Shell’s issues with the Ejama-Ebubu community and by extension the Ogonis and the Rivers state government can be traced to the civil war, a fact that Shell has acknowledged without accepting culpability.
An August 24, 2020 media release from Shell with the caption – “THE PURPORTED SALE OF SPDC’S KIDNEY ISLAND ASSET AND INTEREST IN OML 11” provided valuable context: “The root cause has its origin in a spill caused by third parties during the Nigerian Civil War, a challenging period which resulted in significant damage to oil and gas infrastructure in the Niger Delta region. While SPDC does not accept responsibility for the spill, the affected sites in Ejama Ebubu community were fully remediated, and this was certified by the government regulator.”
Shell’s attempt at remediation did not impress the Ejama-Ebubu community who many decades after the devastation filed a claim for N17billion as damages against SPDC in 2001 at a Federal High Court of Nigeria.
The court case was filed 6 years after Ken Saro Wiwa, writer and environmental activist were judicially murdered alongside eight other Ogoni elders by the Sani Abacha regime. Saro-Wiwa had been in the vanguard of the campaign for compensation under the aegis of the Movement for the Survival of Ogoni People (MOSOP)
That same year, the court gave judgment against SPDC and awarded the claim. But the legal brickbats were merely beginning as Shell filed an appeal and in defending their action alleged that it was not “given reasonable opportunity to defend the facts of the case.”
Shell would lose the appeal with N34bn awarded against it in in 2010. But it was not done fighting. The company obtained an order to stay the execution of the judgment as it went ahead to file another appeal at the Supreme Court in 2017. The appeal was considered then summarily dismissed in a judgment delivered by Justice B. Akaahs.
With that first Supreme Court Victory, the community attempted to enforce the judgment by taking over Shell’s assets in Nigeria and abroad. The British courts refused to accede allowing that the judgment and award of claims by the Nigerian courts was a “‘breach of natural justice’ in the proceedings against Shell in Nigeria. The English court also noted that the community had “materially overstated” the value of the judgment which the claimants admitted was N34.716billion.
In July 2019, Shell continued fighting with a suit which is filed at the Supreme Court asking the apex court to set aside its earlier judgment because according to Shell the Supreme Court did not fully consider the merits of their appeal before upholding the decision of the appeal court.
That suit was decided on Friday, November 27, 2020, when Justice Centus Nwese noted that the appeal filed was “frivolous” and “lacked merit” before dismissing it for being “incompetent and lacking in merit”.
With the legal tussle over, it is pertinent to consider the current situation and a few developments as a means of determining the future of OML 11: the compensation due to the community has ballooned from N34.716billion to N182billion and Rivers state is now claiming ownership of Shell’s 45% interest OML 11 which it ostensibly purchased as a means of safeguarding the interests of the Ejama-Ebubu community and Rivers state.
So, looking to the future, will Rivers state set up an oil company to operate OML 11 or will it let Shell operate it and then share the profit? If this is an option will Shell be willing to sit at the table and jaw-jaw with Governor Wike and his team? How does the judgment affect the communities especially with the Ogoni’s already crying out that they were not carried along before the State government’s purchase of OML 11? What happens to Kidney Island which is a key logistical asset and integral as a support base to companies like Amni, Conoil, Moni Pulo, Oriental Energy and Century Energy?
These questions are critical because OML 11 has performed sub-optimally for decades and the time may well have come to consider the future of this important oil and gas asset in the light of the cessation of legal hostilities.
* Matthew is a public affairs analyst
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Source: www.vanguardngr.com
