Shell not off the Hook for tens of billions in Clean up liabilities, after Nigeria asset sale
- Kebetkache
- 1 day ago
- 4 min read
Shell will retain legal liability and moral responsibility for the clean-up of historic pollution in the Niger Delta if the buyer of its Nigerian subsidy SPDC cannot pay, warn impacted community members and international supporters as investors meet for the Shell plc Annual General Meeting (AGM). These liabilities, from 70 years of oil exploration and extraction, could total tens of billions of dollars.
Shell claims that under the terms of the sale to the Renaissance Group – a consortium of five firms comprising four Nigerian exploration and production companies and an international energy group – it has passed these liabilities to the buyer. However, under Nigerian, English and International law, there may be historic and residual liability that remains with Shell plc.
In addition, as part of the sale, Shell provided $2.5 billion USD in loan facilities to Renaissance. The terms of this loan deal remain opaque, Niger Delta groups and civil society organisations say, raising questions about whether Renaissance will be able to repay. Such opacity is also completely inconsistent with transparency obligations Shell signed up to as a board member of the EITI.
Nigerian authorities have raised concerns about the ability of Renaissance to pay for clean up and remediation liabilities. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) originally rejected Shell plc’s divestment application in October 2024, citing Renaissance's lack of financial and technical ability to manage the assets, following concerns raised by international consultants S&P Global in a report, which remains secret. While this ruling was overturned by the Nigerian presidency, SPDC, Renaissance and the Federal Republic of Nigeria are now facing a lawsuit over the oil license transfer in Nigeria courts, on the grounds of failure to comply with Nigerian law, including failing to provide a required study on the state of the environment. A session of that court case is scheduled for May 26, 2025.
Repairing the human and environmental damage caused to local communities is likely to cost at least $12 billion in just one of the 9 Niger Delta states where Shell has been active, according to a comprehensive 4-year study by international researchers for the Bayelsa State Oil and Environmental Commission. In addition, Shell and its subsidiaries and associates are parties to a number of legal disputes in Nigeria, the USA, and England calling for compensation to impacted communities. Shell management itself acknowledges in its 2024 annual report that these are “material” in scale.
In addition to the suit over the Renaissance sale, Shell is also facing two lawsuits in the UK. One by the Ogale and Bille communities alleges that Shell contaminated their land and waterways, and another by the Bodo community claiming cleanup costs of at least $660 million USD.
This pollution is directly harming the livelihoods and health of communities in the Niger Delta. One recent study by the Kebetkache Women Development & Resource Centre found women in the community of Otuabagi had 8000 times WHO permissible limits of hydrocarbon levels in their blood. Chronic exposure to these chemicals can lead to cancer, cardiovascular diseases, neurological illnesses, respiratory disorders, visual and gastrointestinal ailments, and skin conditions. Other studies have documented the impact of spills on the local fishing industry.
Nigerian civil society groups and international allies will attend the Shell AGM on May 20 to ask Shell management to provide assurances that oil pollution in the Niger Delta will be fully cleaned up and communities compensated.
Dr. Emem Okon, Executive Director of Kebetkache Women Development & Resource Centre, (Nigeria): “When will Shell stop prioritising profit over public health? Our findings from the blood tests of 80 women in Otuabagi, show hydrocarbon levels more than 8000 times above World Health Organization permissible limits. The Bayelsa Oil and Environment Commission tested the blood of 1600 persons and all had hydrocarbons in their blood too. Women are suffering from respiratory diseases, fertility problems, breast cancer, eyesight impairment, among many others! Shell cannot divest without clean-up and remediation!”
Nick Hildyard, Founder and Director of The Corner House (UK): “Why should investors have any confidence that the pollution for which Shell is responsible will be cleaned up when Shell itself has reportedly acknowledged to the UK Government it had ‘encountered difficulties persuading NNPC and the wider Nigerian authorities to agree to permit sale’ and that ‘NNOC said there is no one able to buy and run the assets’; and that, ultimately, ‘We just have to trust that they [Renaissance] can handle the cleanup’?
Ana Xambre Pereira, Advocacy Officer, Both ENDS (Netherlands): “A just energy transition is critical and it is about time Shell takes part in it. Shell’s current exit is not a responsible divestment nor an energy transition, it’s an offloading of toxic assets and liabilities onto the local communities, while Shell continues its offshore fossil fuel operations and walks away with the profits. A just energy transition means enforcing clear standards for responsible divestment now, before more communities are sacrificed.”
Cindy Coltman, Co-director of Hawkmoth (Netherlands): “We stand in solidarity with the people of the Niger Delta calling for justice and accountability of Shell plc. There is no mention of a clean-up fund in Shell’s Annual Report regarding the sale of SPDC. This deal is unfair to the people affected by decades of unabated oil pollution and Shell seems poised to develop, trade and benefit from Nigerian offshore oil and gas without taking responsibility for cleaning up and decommissioning aging infrastructure onshore. This cannot stand.”
Further resources:
Pollution impacts in the Niger Delta
Current Legal Cases Against Shell plc
Background on the sale of SPDC to Renaissance