“No Shell person or NNPC has come here in respect of the report. But as I talk to you, they are drilling. The same Nigerian Army and police that are supposed to protect the Nigerian people will carry them to go and put more benzene (into the environment). If we take laws into our hands, you hear (restiveness) and violence.” The accusations have been put before Shell in an email for weeks, but the company did not respond.
Posts Tagged ‘Corruption’
Prison terms for corruption in oil and gas contracts
Photo shows Sakhalin II, Russia’s first liquified natural gas project. Courtesy of Gazprom.
Hi John,
I case you haven’t seen it, looks like there has been a corruption conviction involving Sakhalin II. Although the story below does not mention Sakhalin II by its exact name, the story says the project “is one of the largest integrated oil and gas projects in the world and involves the exploration and development of several different oil and gas fields in the Sea of Okhotsk off Sakhalin Island (part of the Russian Federation).”
http://www.egovmonitor.com/node/45943
That is how Sakhalin Energy describes the project, so I am sure its Sakhalin II!
Prison terms for corruption in oil and gas contracts
31 January 2012
Prison sentences have been handed down in a case where corrupt payments were obtained for passing on confidential procurement information to bidding suppliers. The contracts related to a series of high-value oil and gas engineering projects between 2001 and 2009 in Iran, Egypt, Russia, Singapore and Abu Dhabi
The sentences are:
- Andrew Rybak (d.o.b. 28/03/56) of Newbury, Berkshire. Five years’ imprisonment on each count, to be served concurrently.
- Ronald Saunders (d.o.b. 01/02/47) of Hook, Hampshire. Three years and six months’ imprisonment on each count, to be served concurrently,
- Philip Hammond (d.o.b. 11/06/54) of Brussels, Belgium. Three years’ imprisonment on each count to be served concurrently.
- Barry Smith (d.o.b. 19/04/40) of Hindhead, Hampshire. Twelve months’ imprisonment, suspended for a period of 18 months and 300 hours of unpaid work.
In addition Rybak and Hammond were also disqualified from acting as company directors for a period of ten years.
Confiscation actions are to be undertaken against the first three defendants.
The case, codenamed Operation Navigator, was tried at Southwark Crown Court, where the defendants were found guilty on 25 January.
In passing sentence today, HHJ Deborah Taylor, addressing Rybak, Saunders, Hammond and Smith said, “All this was done without the slightest regard for the interests of others. Your activities in connection with these conspiracies had little, if anything, to do with the interests of those engaged with the project, but were parasitic, leeching money for your benefit.“
Commenting on the sentences, SFO Director Richard Alderman said, “Demanding backhanders in exchange for confidential and advantageous information saps business and is completely unacceptable to society. Hopefully these sentences will ring out the message loud and clear that the criminal justice system will do all it can to combat wrong-doing like this.”
Outline
The investigation began in April 2008 as a joint operation between the Serious Fraud Office and the City of London Police. It was triggered by allegations relating to a project in Singapore, but it soon became apparent to the investigators that a number of other projects were also tainted by corruption.
The confidential information corruptly supplied to bidders was held by companies that undertook procurement for the projects. Saunders and Rybak, who were engaged as agency workers by the procurement companies, abused their access to this information. They indicated to suppliers who were bidding for the contracts that information could be made available if they agreed to pay for it. Disguised as “consultancy services”, the illicit payments were shared out amongst the co-conspirators.
The contracts related to these projects (indicating defendants involved);
a) Styrene Monomer Project, Iran. (Rybak, Saunders and Hammond)
b) QASR Gas Gathering Project, Egypt. (Rybak and Saunders)
c) Sakhalin Island Project, Russian Federation. (Rybak, Saunders and Hammond)
d) Singapore Parallel Train Project. (Rybak and Hammond)
e) Hydrogen Power Project, Abu Dhabi. (Rybak, Saunders, Hammond and Smith)
Summaries of the contracts and assistance provided by the procurement companies to the SFO are contained in our press release of 25 January.
Notes for editors:
- Charging of defendants. See press release 22 October 2010.
- The fifth defendant, Robert Storey, was tried in relation to the Abu Dhabi project only but the jury could reach no verdict.
- Another suspect (a UK national) is resident in the Philippines and it has not been possible, thus far, to bring him to trial in the UK.
- The Serious Fraud Office is a government department responsible for investigating and prosecuting serious and complex fraud. The SFO is headed by the Director (Richard Alderman) who exercises powers under the superintendence of the Attorney General. These powers are derived from the Criminal Justice Act (1987).
Serious Fraud Office, Elm House, 10-16 Elm Street, London, WC1X 0BJ
Press Office tel: 020 7239 7000 7004 or mobile: 0796 655 8903
Main switchboard tel: 020 7239 7272
SFO Confidential hotline for whistleblowers 020 729 7388
press.office@sfo.gsi.gov.uk – or via – www.sfo.gov.uk
EXTRACT FROM THE SFO PRESS RELEASE
Sakhalin Island Project. This is one of the largest integrated oil and gas projects in the world and involves the exploration and development of several different oil and gas fields in the Sea of Okhotsk off Sakhalin Island (part of the Russian Federation). Fluor Ltd, a company in Farnborough, managed the procurement process for this project. A number of separate packages were investigated in detail, including: air compressors, oil pumps, generator sets, gas turbines, equipment to treat fuel gas, oily water treatment and large bore pipes. These packages were worth over £17 million. Saunders and another man were engaged as contractors by Fluor Limited between 2006 and 2008. Again, Rybak and Hammond received confidential information from the insiders which they sold on to bidding companies. Some payments of around £357,000 and US$229,000, were made from successful bidders, which were then distributed between the defendants.
Allegations surrounding Shell Malabu $1.3 billion Nigerian oil deal
Printed below are several recent articles from Nigerian publications containing allegations of corruption relating to the Shell Malabu 9 billion barrel oil block deal.
Click to continue reading “Allegations surrounding Shell Malabu $1.3 billion Nigerian oil deal”
Grieve must not terminate UK-Saudi bribery investigation
Transparency International
10 October 2011
In the wake of serious bribery allegations involving GPT, the UK subsidiary of European defence company EADS, and the Saudi Royal family, Transparency International UK is calling on the Government to support a full investigation by the Serious Fraud Office (SFO).
The Attorney General is reportedly deliberating over whether the SFO should continue to investigate allegations that GPT made illicit payments to the Saudi Royal family in order to secure a contract worth £2 billion.
The Attorney General’s decision will face a high level of international scrutiny because the UK’s anti-corruption record is currently under review by the United Nations, the Council of Europe and the OECD. Under Article 5 of the OECD Anti-Bribery Convention, to which the UK is a party, a state cannot allow political, economic or diplomatic considerations to interfere with the investigation and prosecution of foreign bribery cases. This echoes the BAE Systems case in 2006, when the Blair government caused an international outcry by forcing the SFO to drop an investigation into allegations of bribery in the Al Yamamah UK-Saudi defence contract.
Chandrashekhar Krishnan, Executive Director of Transparency International UK said “Under no circumstance should the UK allow political, economic or diplomatic considerations to affect the course of justice. If the SFO believe they have a strong case, it is vital that they are allowed to investigate and, if necessary, prosecute without political interference.
“We would expect EADS, as leading members of the international defence industry’s own anti-corruption initiatives such as the Common Industry Standards for Anti-Corruption and IFBEC, to cooperate with the SFO and undertake a thorough internal investigation into these allegations.
“The UK’s anti-corruption performance is currently under international scrutiny and the Government’s decision will be closely watched by any corrupt company and government overseas looking for an excuse to continue business as usual. It is imperative that the Government sticks by the international rules and ensures this investigation goes ahead.”
Notes
- It has been reported that the Serious Fraud Office opened an investigation into GPT, a British subsidiary of EADS, after a whistle-blower alerted them to a payment of £11.5 million made to a Swiss bank account controlled by a member of the Saudi Royal family.
- The Attorney General has reportedly been briefed and must now decide whether or not to allow a prosecution to proceed.
- Transparency International UK [registered charity no.1112842] is the UK chapter of the world’s leading non-governmental anti-corruption organisation. With more than 90 chapters worldwide, Transparency International has extensive global expertise and understanding of corruption.
- Transparency International UK’s Defence and Security Programme helps to build integrity and reduce corruption in defence and security establishments worldwide through supporting counter corruption reform in nations, raising integrity in arms transfers, and influencing policy in defence and security:www.ti-defence.org Transparency International UK is part of the global movement against corruption: www.transparency.org.uk
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For more information, please contact Rachel Davies on 020 79227967/ 07411 347754 or Maria Gili on 020 79227974
Related information: SHELL CONNECTION WITH THE SAUDI ARABIA / AL YAMAMAH BAE ARMS SCANDAL
ROYAL DUTCH SHELL SKULLDUGGERY IN NIGERIA
By John Donovan
We have been reporting for some time about Shell skullduggery in Nigeria, including:
- Shell’s sinister commercial relationship with militant leaders carrying out attacks against Shell employees and pipelines
- arming Nigerian police spies
- embedding Shell spies throughout the Nigerian government
- engaging in massive corruption
Our sources have included Wiki-leaks, a senior manager inside Shell Nigeria and a senior member of Shell Global Security.
Some related articles reporting on Shell’s shameful track record in Nigeria:
*ROYAL DUTCH SHELL NIGERIAN CORRUPTION SCANDAL
*WIKILEAKS: SHELL EMBEDDED SPIES IN NIGERIAN GOV
*Shell embedded spies in governments of Nigeria, Dubai and Iraq
*PDF ORIGINAL ARTICLE SHELL EMBEDDED SPIES IN NIGERIA
*SHELL SETTLES CLAIM FOR MURDER & TORTURE IN NIGERIA
*SHELL COMPLICITY IN NIGERIAN MURDER OF CIVILIANS
*UNLOVEABLE SHELL, THE GODDESS OF OIL
*CLEAN-UP FOR NIGER DELTA AND SHELL’S REPUTATION
*SHELL PAYS $10 MILLION CORRUPTION FINE TO NIGERIANS
*SHELL ACCEPTS LIABILITY FOR TWO OIL SPILLS IN NIGERIA
A recent Guardian article confirmed from its own sources our long standing allegation that Shell has fuelled violence in Nigeria by paying rival militant gangs.
It is interesting in the light of this confirmation to reflect on past events.
For example, an article published by Bloomberg in November 2008 under the headline:
“Nigerian Oil Pipe Fire Extinguished, 6 Workers Died, Shell Says“
The article mentions that “Nigerian oil production rate has suffered this year from militant attacks and oil theft“, thereby implying that the fire – the cause of which was unknown – may have resulted from sabotage by militants.
If this was the case, were the militants paid by Shell, bearing in mind that militant attacks were driving up the global price of oil, fortuitously generating billions of dollars in extra revenue for Shell?
Was Shell responsible for the deaths of its own employees?
From our archives: Viewpoint: Sex, drugs and natural gas royalties
The inspector general found an e-mail from some dork at Shell Pipeline to a woman in the federal royalty office, asking her to join him at a tailgate party before a Houston Texans football game: “Have you and the girls meet at my place at 6 a.m. for bubble baths…
baltimoresun.com
Viewpoint: Sex, drugs and natural gas royalties
By Carl Hiaasen
September 17, 2008
People always say the Bush administration is in bed with the oil companies, but it turns out to be literally true.
According to the Interior Department, some government officials in charge of collecting oil and gas royalties smoked pot, snorted cocaine and had sex with employees of big energy firms.
Meanwhile, the rest of us were getting screwed at the gas pump.
Three reports delivered last week to Congress portray “a culture of ethical failure” in which employees of the federal Minerals Management Service often accepted gifts from oil and gas interests, steered lucrative contracts to cronies and partied hard with those with whom they did business on behalf of the U.S. taxpayer.
The MMS collects about $10 billion annually in royalties from energy companies that drill offshore and on federally owned lands. Beside the IRS, it’s one of the biggest sources of government revenue.
During the Bush years, the agency has faced harsh criticism for failing to vigorously pursue millions of dollars in outstanding or potential royalties. One controversial program, called royalty-in-kind, allows energy companies to pay the government in gas and oil instead of dollars.
According to the inspector general’s report, the royalty-in-kind office of the MMS was rife with “substance abuse and promiscuity.” Certain fun-loving employees were known as the “MMS Chicks” by energy firm employees, who would generously invite the women to lively social events.
Oil and gas companies named in the reports are Chevron, Hess, Shell Pipeline and Gary-Williams Energy. They paid for MMS workers to attend PGA golf tournaments, professional baseball and football games, ski trips, a Toby Keith concert, paintball-shooting events and “treasure hunts,” whatever that means.
The inspector general found an e-mail from some dork at Shell Pipeline to a woman in the federal royalty office, asking her to join him at a tailgate party before a Houston Texansfootball game: “Have you and the girls meet at my place at 6 a.m. for bubble baths and final prep. Just kidding.”
This stuff would be a whole lot funnier if the country’s energy policy weren’t a disaster and gas weren’t $4 a gallon. The Republicans’ renewed lust to open more offshore leases might not bring down the price of crude, but it would keep the good times rolling at the Interior Department.
Apparently the plan is to tailgate our way to energy independence.
Interestingly, while at least a dozen former and current MMS employees were named in the reports, the Bush Justice Department has chosen to go after only one, Jimmy W. Mayberry.
Last month, he pleaded guilty to a felony conflict-of-interest charge for arranging a juicy consulting contract for himself, as sort of a retirement gift.
The woman who helped Mr. Mayberry hatch this scam was Lucy Q. Denett, then the associate director of minerals revenue management. She’s also married to Paul Denett, who until recently was the top procurement honcho in the White House Office of Management and Budget.
Mrs. Denett has retired from the Interior Department for personal reasons and won’t be prosecuted. She told investigators she’d made a “very poor” decision by helping her pal Mr. Mayberry rig the consulting contract. No kidding.
Another Bush hack who likely will escape punishment in the scandal is Gregory W. Smith, former program director of the royalty-in-kind office. The inspector general said that Mr. Smith wrongly used his government position to market a private tech-services firm to gas and oil companies, and that the firm paid him $30,000.
Mr. Smith, now working for a Denver oil company, has refused to publicly discuss the allegations.
The report also accuses him of taking gifts from energy industry representatives, having sex with two of his subordinates and buying cocaine on several occasions from his secretary and her boyfriend.
Who says that being a bureaucrat is dull work?
Such colorful revelations shed some light on the mysterious energy task force assembled by Vice President Dick Cheney at the president’s direction, shortly after he took office.
Mr. Cheney has stubbornly refused to tell American taxpayers what was decided or who participated in these important meetings, though it’s known that many major players were involved, including those geniuses at Enron.
No wonder the vice president is so secretive about what took place. Obviously, these weren’t serious policy meetings; they were toga parties, with Mr. Cheney dressed up as Bluto from Animal House.
In their wildest dreams, the boys from big oil couldn’t have imagined how much fun the next eight years would be – sex, drugs and “treasure hunts.”
Party on, dudes. Drill your brains out.
Carl Hiaasen is a columnist for The Miami Herald.
MOSOP URGES BISHOP KUKAH TO END CORRUPTION IN NIGERIA
STATEMENT ISSUED BY MOSOP (Movement for the Survival of the Ogoni People)
8 September 2011
MOSOP URGES Dr. GOODLUCK JONATHAN’ PRESIDENTIAL COMMITTEE CHAIRMAN TO END CORRUPTION IN NIGERIA.
In a congratulatory message today to Bishop Matthew Hassan Kukah, MOSOP President/Spokesman, Dr. Goodluck Diigbo implored Bishop Kukah on his installation as the Bishop of Sokoto Diocese to champion the cause to end corruption in Nigeria and to promote economic and political justice.
Dr. said: “In your capacity as Chairman of the Ogoni –Shell Conflict Resolution and Reconciliation Presidential Committee, I implore you to use your new position to work towards the meeting of minds in the Ogoni situation, in a way that can usher in peace and promote economic and political justice in Nigeria.
In addition, I further implore you to champion the cause to end corruption, misrule, internal colonialism and arrogance of power in Nigeria. The Ogoni people are staying strong, and we will continue to count on your support.The history of Christianity reminds us that Christianity was officially persecuted for three centuries. The same history tells us that Roman Christianity is the mother of Western civilization. The Ogoni people are full of hopes and dreams that the day is coming when the Ogoni story will become the story of Christianity and Western civilization.”
The full Statement is reproduced below:
Dear Rt. Rev. Msgr Matthew Hassan Kukah,
I write to congratulate you for the great rise on your episcopal ordination and installation as Bishop of Sokoto Diocese today, Thursday, September 8, 2011 following your recent elevation by His Holiness Pope Benedict XVI.
On behalf of the Movement for the Survival of the Ogoni People, MOSOP, I thank God for your lift. God remains the greatest judge. God puts down one, and lifts up another.
In your capacity as Chairman of the Ogoni –Shell Conflict Resolution and Reconciliation Presidential Committee, I implore you to use your new position to work towards the meeting of minds in the Ogoni situation, in a way that can usher in peace and promote economic and political justice in Nigeria. In addition, I further implore you to champion the cause to end corruption, misrule, internal colonialism and arrogance of power in Nigeria. The Ogoni people are staying strong, and we will continue to count on your support.
The history of Christianity reminds us that Christianity was officially persecuted for three centuries. The same history tells us that Roman Christianity is the mother of Western civilization.
The Ogoni people are full of hopes and dreams that the day is coming when the Ogoni story will become the story of Christianity and Western civilization.
Dr. Goodluck Diigbo
MOSOP President/Spokesman
Released by:
Tambari Deekor
Assist. Editor, MOSOP Media
tdeekor88@gmail.com
The Movement for the Survival of Ogoni People (MOSOP) is an Ogoni-based non-governmental, non-political apex organisation of the Ogoni ethnic minority people of South-Eastern Nigeria and was founded in 1990 with the mandate to campaign non-violently to:
• Promote democratic awareness;
• Protect the environment of the Ogoni People;
• Seek social, economic and physical development for the region;
• Protect the cultural rights and practices of the Ogoni people; and
• Seek appropriate rights of self-determination for the Ogoni people.
Shell’s North Sea Reputation sunk by severe corrosion
“The drip, drip, drip of negative information has been every bit as corrosive to the company’s reputation as the oil leaking from its pipe. It was not until a week after the oil was first spotted that the company apologised.”
By John Donovan
We have printed below extensive articles published over three pages of The Sunday Times on 21 August 2011.
It was this development which sparked a number of other major news stories published the following day.
The Sunday Times approached us for our help, which we were pleased to provide over a number of days. We put the newspaper into contact with our Shell related sources, including Bill Campbell. We provided a considerable volume of information from our extensive files. We also supplied documents referred to in the article, including the letter the HSE offshore division sent to Shell on 18 July 2011, which we now put into the public domain. This was kindly supplied to us by the HSE press office.
This is what a retired Shell North Sea Platform expert said about the HSE letter:
After reading the 18th July 2011 HSE letter to Shell regarding Brent C I am totally shocked at the content. The cumulative number of denials of a slack safety regime are issued almost every week for one misdemeanour or another somewhere within Shell operations over many years. Notwithstanding the assurances given that safety is always the number one priority, always the first consideration in anything done, total commitment to safety, we learn from our mistakes etc etc. The HSE finally put the boot in, great, now what about the other platforms.
This report reveals a very different state of affairs from that we are assured, confirming what the Legal and Public affairs Departments, various Directors, Vice Presidents and Managers say is just very HOT AIR. I trust that the Shareholders and public make their displeasure known and the responsible Directors, Vice Presidents and Managers are subjected to disciplinary procedures for gross misconduct and bringing the Shell name into disrepute.
What a shambles!
As regular visitors to this website will be aware, Mr Campbell has previously expressed his concern about the relationship between Shell and some HSE officials. In this connection, it is relevant to note that an investigation in the USA found that Shell had a corrupt relationship with federal oversight officials. We later supplied a US government department at its request with Shell internal documents leaked to us by our insider sources in relation to another corruption investigation.
The Sunday Times Scotland Front-page lead story: 21 August 2011
Shell had oil rig safety warning
Mark Macaskill
AN internal investigation by Shell eight years ago raised serious concerns about safety in the Gannet oilfield, where the company has been battling to contain the worst spill in British waters for a decade.
Documents obtained by The Sunday Times reveal that dozens’ of unapproved repairs were carried out on Shell’s Gannet Alpha platform. The audit in 2003 also showed 317 fire and gas sensors were unreliable.
The concerns were gathered by Shell after the Brent Bravo tragedy that year killed two oil workers. Issues relating to that platform and Shell’s other North Sea installations, including Gannet Alpha, were notified to Scottish authorities investigating the tragedy.
Details of the audit are contained in papers held by Bill Campbell, a former senior Shell employee, who has raised concerns about the company’s health and safety record.
Last night, Shell said efforts to turn off a valve that had been leaking oil over the past 10 days had been successful. The cause of the leak 300ft below the surface was not known. The section of pipeline had been inspected in October last year. An estimated 214 tons of oil escaped.
The incident has dealt a blow to British companies keen to expand the industry by drill off Greenland, despite protests from environmentalists.
Charles Hendry, the energy minister, has said such operations are “entirely legitimate” as long as they adhere to Britain’s “robust’” safety regulations.
Shell has been at the forefront of plans to drill in the Arctic’s Beaufort and Chukchi seas. Since January the company’s North Sea operations have been hit by the death of a maintenance worker, a series of gas leaks, equipment collapsing off a platform into the sea and a 15,000-hour repair backlog.
Shell is also under pressure to deal with safety issues on another of its North Sea platforms, Brent Charlie. A Health and Safety Executive (HSE) inspection in May found parts of the installation were “suffering from severe corrosion·”
The agency warned Shell last month there was a risk of injury from plant equipment. It also found that the redundant plant equipment “did not appear to be inspected or maintained”. Shell was given until last Thursday to respond with a plan.
The latest spill is the largest in British waters since 2000, when about 344 tons of oil escaped in Conoco’s North Sea Hutton field.
Last week, Campbell said more leaks and equipment failures are likely as platforms, many from the 1970s, get older. “In my view, Shell hasn’t invested enough money over the last 10 years in maintaining its facilities,” he said. “More has been done recently but it’s too little, too late.”
Richard Lochhead, the rural affairs and environment minister, has written to Chris Huhne, the UK government’s climate change secretary, calling for greater transparency in the reporting of oil incidents.
The HSE recently warned that only one in 30 of Britain’s North Sea oil platforms was in good condition and expressed concern that companies were neglecting workers safety.
(Continued on page 2)
More than 96% of installations in the North Sea were found to require improvements during inspections over the past three years, with 20% showing “major failings”.
Ministers have pledged to hold an inquiry into the Gannet spill but environmental bodies said the remit should be expanded. “It is important that the inquiry examines the management of the incident both by Shell and the various public agencies, said Stuart Housden, from RSPB Scotland.
He added: “The inquiry should also investigate the readiness of UK and Scottish agencies to predict, monitor and minimise any environmental impacts.”
Conservationists have warned that the oil leak poses a threat to seabirds, including kittiwakes, puffins, guillemots and razorbills. An operation to lay concrete mats on the pipeline where the leak occurred in order to secure it to the seabed is continuing.
Shell said safety was a “foremost priority” and that the company had invested more than £600m in recent years to upgrade North Sea facilities.
A company spokesman said: “We constantly inspect, monitor and review all our assets. At present we do not know what caused the leak from the Gannet Alpha flowline. This will be the subject of a full investigation, together with the authorities. “Work continues to progress on the Brent Charlie platform about which Shell is in regular liaison with the regulatory authorities, including the HSE.”
The Gannet Alpha leak was spotted during a routine North Sea helicopter flight.
Page 17 (Whole page)
ON THE BRINK
Gannet leaked hundreds of tons of oil into the environment. So how serious is the North. Sea drilling industry about updating its rigs- and how long before another disaster, ask Gillian Bowditch and Mark Macaskill
It was a routine flight from Aberdeen, but as the Bristow helicopter ferried oil workers across the North Sea, one passenger noticed something unusual. On the surface of the water, just a few miles from the Gannet Alpha platform, was a large oily sheen.
The alarm was raised with air-traffic control. Within the hour, Shell, the rig’s owner, warned the Department of Environment and Climate Change that a leak had been detected more than 100 miles off Scotland’s northeast coast.
Ministers were not unduly concerned – Shell was confident that it was just another one of the hundreds of minor spills that are reported in the North Sea every year. It gave assurances that the situation was under control. Within days, however, it became apparent that the spill was far more serious than Shell wanted to publicly admit.
Privately, department officials were forced to concede that the leak was “substantial”, as Shell sought to minimise negative coverage by strangling the flow of information to the national media and environmental bodies.
Last night, Shell confirmed that, 10 days after it was first detected, the leak had been completely stopped. The company’s problems, however, will not stop with the release of oil into the North Sea.
The incident, the worst leak in British waters since 2000, is a huge embarrassment for the company not least because, despite millions of pounds of investment in its North Sea operations, it failed to spot the leak. Alex Salmond, the first minister, has been criticised for playing down the significance of the spill and accused of being too close to the oil industry.
Ever since BP’s Deepwater Horizon spill in April last year, which killed 11 and resulted in 4.9m barrels of oil flooding into the Gulf of Mexico – the biggest disaster in the history of the industry — environmental campaigners have stepped up their targeting of the oil sector. In the aftermath of Deepwater, Shell’s chief executive Peter Voser claimed the BP blowout could never have happened to his company.
“The risk-management practices of some companies in the Gulf of Mexico do lag behind the standards set by other companies,” Voser told analysts in February. ‘We at Shell have been applying the best of the North Sea standards to our worldwide operations for many years.” It is a quote that may come back to haunt him.
The company estimates that during the Gannet leak, 1,600 barrels of oil or 218 tons – more than triple the amount of oil discharged into UK waters in the whole of 2009 – has spilled into the North Sea from a pipe 300ft below the surface.
The leak could not have come at a worse time for Shell, as it attempts to persuade regulators to allow it to carry out drilling in the sensitive waters around the Arctic.
But the questions it raises go far beyond Shell and, the safety of its drilling activities. Conservationists want to ask how safe is the North Sea oil industry? Is a large scale environmental disaster lurking around the corner and is the SNP government too close to the industry for Scotland’s good?
IT was only on Friday August 12, after the oil industry journal Upstream ran a short article on the leak based on its own sources that Shell issued a press release stating that it had stemmed the leak “significantly”. Even then, the company was unable to provide information on the size and cause of the leak. Early last week, a second leak was discovered.
It wasn’t until Friday, nine days after oil was first found, that Shell was finally able to close off the vital valves. The task of removing the residual 660 tons of oil in the depressurised flow-line would take some time the company said.
The drip, drip, drip of negative information has been every bit as corrosive to the company’s reputation as the oil leaking from its pipe. It was not until a week after the oil was first spotted that the company apologised.
Glen Cayley, a technical director of Shell’s exploration and production activities in Europe, said: “This is a significant spill in the context of annual amounts of oil spilled in the North Sea. We care about the environment and we regret that the spill happened. We have taken it very seriously and responded promptly to it.”
The oil sector is arguably Scotland’s most important industry’. Tax revenues from oil and gas production were £9.3 billion in 2010/11 and are expected to rise to £13.4 billion this year.
About 196,000 people are employed by oil and gas companies in Scotland, 45% of the UK total, and the industry satisfies about two-thirds of the UK’s primary energy demand. But UK oil production is in decline. The North sea produces about 2.3m barrels a day, half of what it produced at its peak 12 years ago, and the industry is waging a constant battle over the economics of extracting the North Sea’s remaining “blackgold”.
Although four-fifths of North Sea production is controlled by 14 companies, traditional, global oil and gas companies, such as Shell, which made profits of £5 billion in the past quarter, are gradually reducing their presence and investments in the region. The big companies see their futures in the larger fields of Russia, the Middle East and North Africa. In their place, smaller, lesser-known firms are exploiting the remaining North Sea resources.
“It used to be a good field if it was 100m barrels,” says one oil industry expert. “Now 25m barrels is considered a significant field, and even smaller fields are being developed. There is a constant battle to keep platforms profitable in the face of declining asset integrity.”
As a result, many North Sea oil platforms are working way beyond their envisaged lifespan.
When they were built, most were expected to last 20 years, but according to figures from the oil specialist Det Norske Veritas and the Energy Department, 44 North Sea platforms – more than 15% of the total – are more than 4O years old. According to the Health and safety Executive (HSE), it is “evident that this proportion is steadily increasing, particularly as the rates of platform decommissioning and new installations are relatively low.’”
John Bradbury, of the specialist publication Petroleum Review, says: “For operators today, keeping corrosion at bay – or at least within safe limits – while continuing to eke out tail-end production at an economically viable level is a constant battle. Corrosion control and monitoring is made harder still in an environment where cost is paramount and resources are limited.”
Despite its size and profitability, Shell’s safety record is by no means exemplary. The North Sea spill came just weeks after the company admitted liability for a massive oil spillage in Ogoniland, Nigeria. Shell says the vast majority of spills in the Niger Delta are due to sabotage, but it faces substantial legal claims.
Closer to home, Shell’s North Sea Brent field platforms – Alpha, Bravo, Charlie and Delta – were temporarily shut down in January after “metal fatigue” led to a chunk of protective railing falling into the sea.
Just days before the Gannet spill, leaked HSE documents showed that the government agency feared “catastrophic consequences” on Shell’s ageing Brent Charlie platform. The scale of along-running series of gas leaks meant that ignition was “almost inevitable,” according to the document, leading to fears of another disaster on the scale of Occidental’s Piper Alpha, when 168 men were killed in an explosion in 1988.
One report, dated July 18, revealed that Shell was facing a 15,000-hour maintenance backlog on technical equipment. This is on top of extensive work being carried out to overcome leaks of hydro- carbon gas and hydrogen sulphide, known as glugs, that have led to the shutdown of Brent Charlie and the loss of the output of 30,000 barrels of oil a day.
According to Upstream, the July 18 document, sent by the HSE to Shell after an inspection on May 30 and 31, also reveals that inspectors found that areas of the platform were corroding.
Corrosion is a sensitive issue for Shell. A 2006 report into the deaths of two workers after a gas leak on Brent Bravo in 2003 ruled that the deaths could have been avoided if Shell had repaired a corroded pipe properly.
Bill Campbell, a former senior manager with Shell, told BBC Scotland’s investigative programme Frontline Scotland at the time that the company faked safety reports and ignored vital maintenance to allow it to carry on producing oil at all costs, an allegation Shell denies.
Shell is working towards reopening 35-year-old Brent Charlie early next year, but has pledged that production will not resume until all necessary work is complete. At a press conference earlier this year, Voser said: “Do we make mistakes? Yes, we do make mistakes, but we learn from and we avoid them in the future.”
Yesterday, a spokesman for Shell said safety was the company’s “fore-most priority at all times”. Shell also insists that the Gannet spill does not undermine its efforts to drill in Arctic waters, where environmentalists warn it will be virtually impossible to contain a large spill in winter.
“We have taken significant steps to make sure we can operate safely and responsibly in the Arctic. We recognise oil-spill prevention and response capability as a critical element of all plans to develop oil and gas resources in the Arctic and we have developed advanced technology to locate, contain and remove oil in various ice conditions which we test regularly.”
Oil company insiders believe environmental activists have overstated the impact of the Gannet leak, which, while significant in UK terms, is tiny compared with Deepwater Horizon or even the 85,000 tonnes of crude oil that leaked into the sea off Shetland in 1993, when the oil tanker, Braer, ran aground.
Richard Lochhead, Holyrood’s environment minister, said little tangible damage has been done to wildlife from the Gannet spill. But there are fears that the SNP’s love affair with oil – a key plank in its independence campaign – may mean it is too§ close to the industry.
Alex Salmond is quick to throw his tuppence-worth into stories where there is no discernible direct Scottish interest,” says Murdo Fraser, deputy leader of the Scottish Conservatives. “He was quick to comment on the riots the other week and yet here we have a major situation occurring in Scotland, which potentially has serious consequences, and the first minister has been remarkably reluctant to make any public comment on the matter.”
The Royal Society for the Protection of Birds wants a full inquiry.
Stuart Housden, its director, believes an inquiry should look beyond the causes and the ability of government agencies to predict, monitor and minimise the environmental impact to the “question of whether our North Sea Oil infrastructure is sufficiently robust to meet the high standards required” and whether maintenance is adequate.
Maura Harrington update on Shell Corrib project
Dear John,
I’ve attached for your perusal up to the minute stuff connected with the proposed Shell/Corrib project in north Mayo.
There are two attachments from the Peoples’ Forum proceedings held at the weekend – Mrs Joy Phido’s was printed as a supplement and included with the main copy of contributions. Mrs Phido’s willingness to travel from London was very much appreciated by the local community and the empathy which has always existed between the Ogoni people and ourselves was once again underlined; there were also very good contributions from those with a national profile – Kieran Allen, Harry Browne and Colm Rapple together with local contributions from Niall King, retired Principal Rossport Primary School and Sam from the Solidarity Camp not forgetting of course Majella McCarron’s paper on the current and developing area of Human Rights.
This was complemented by feedback from discussion groups chaired by Lelia Doolan.
It came as no surprise that Shell disdained to attend as did all their sycophants/hangers on; since Shell took over this proposed project they have consistently refused to engage with local people in any public forum – where everybody hears the same thing at the same time; Shell’s preferred option is to meet with ‘two or three representatives’ behind closed doors and we will never put ourselves in that invidious position.
It was also no surprise that the political parties Fine Gael and Labour now in power couldn’t or wouldn’t arrange to have even one person attend who could report back on proceedings; however, Éamon Ó Cuiv of the discredited and ousted party Fianna Fáil did attend and it was possible for an Independent TD Thomas Pringle to send his PA as rapporteur as Sinn Féin also sent Councillor Gerry Murray.
In a separate development SIPTU, the largest trade union in the country, published its research/discussion report on Thursday 30 June. This report was largely ignored by mainstream media in Ireland which is not surprising given that most of this media is either owned and/or controlled by the O’Reilly family who also own the E&P company Providence Resources plc. It would be good to see this report published on your website to show readers current research and recommendations by the largest union in the country which would probably give the lie to some of Shell’s spinmeisters on the wider stage.
Thank you for your attention in this matter.
My best regards to yourself and your father.
Maura Harrington
Shell accused of supporting Syrian regime
Last updated at 10:05 AM on 31st May 2011
Royal Dutch Shell has been accused of working ‘hand in glove’ with the government in Syria where hundreds of unarmed demonstrators have been killed during protests against the regime.
The firm chartered a tanker to export almost 600,000 barrels of the country’s oil worth $55m, according to campaign group Platform. Shell declined to comment.
Platform researcher Lorenzo Paluello said: ‘While the British and Syrian public believe that suppressing a mass democratic uprising with tanks is problematic, Shell continues to work hand in glove with the regime.
He added: ‘The people of Syria rising up for freedom, but this company has placed itself firmly on the side of corrupt dictators.’






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