Shell says Nigerian oil incompatible with green strategy, discusses with authorities

*Shell Nigeria discloses the balance of risks and rewards associated with the company’s onshore portfolio is no longer compatible with its strategic ambitions, in view of how the onshore production has caused decades of pollution in the country

Isola Moses | ConsumerConnect

Currently in talks with the Nigerian Government on the way forward after half a century of pumping oil out of Nigerian swamps, the Royal Dutch Shell Plc has acknowledged that its spill-prone operations there are not compatible with plans to go green.

The Anglo-Dutch oil firm, reports Bloomberg, has been gradually selling onshore assets in the West African country for over 10 years.

The international oil company (IOC) also has made moves at putting aside lingering problems, such as pollution caused by ruptured pipelines and the resulting legal battles with local communities in Nigeria.

The issue is said to have become more acute in the past year after Shell pledged to transform itself into clean energy giant and gradually wind down its oil and gas business to achieve net-zero carbon emissions by 2050, report said.

Ben van Beurden, Chief Executive Officer (CEO) of Royal Dutch Shell, told investors at the company’s Annual General Meeting Tuesday, May 17, 2021, said: “The balance of risks and rewards associated with our onshore portfolio is no longer compatible with our strategic ambitions.

“We cannot solve community problems in the Niger Delta, and the company has started discussions with the government on how to move forward.”

The AGM, report noted, was dominated by investors’ questions on Shell’s climate strategy, ranging from pleas to set more ambitious targets on reducing carbon emissions and phasing out fossil fuels, to a request that the company “stop apologising” for the products it sells.

In respect of a new report from the International Energy Agency to the effect that the world needs to stop developing new oil and gas fields to prevent dangerous climate change in the future, Chairman, Chad Holliday, said Shell hadn’t had time to study the report but would do so in due course.

Preliminary votes on two competing climate proposals, one put forward by Shell and another by activist group ‘Follow This’, indicated broad investor support for the firm’s energy-transition plans, which see a big expansion in clean energy but also decades more oil and gas production.

Regarding sales, Van Beurden reportedly did not say explicitly that Shell wants to sell the remainder of its oil assets in the Niger Delta, nor did he provide a timetable.

However, it was learnt that a full retreat would be an obvious end point to years of gradual divestment.

Shell has reduced its total number of onshore licenses in Nigeria by half over the past decade, according to report.

One of those deals is now the subject of litigation. Aiteo Eastern E&P Co., a Nigerian company that bought a major oil pipeline from Shell six years ago, is demanding billions of Dollars in damages, said the report.

The firm claims Shell misrepresented the condition of the line and under-counted the volume of crude one of its facilities received from the Nigerian firm.

But Shell replies that Aiteo’s lawsuit is baseless.

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