Royal Dutch Shell Plc  .com Rotating Header Image

Nigerian Senate Reiterates Demand Shell JV Pay $1.5B

THE WALL STREET JOURNAL: Nigerian Senate Reiterates Demand Shell JV Pay $1.5B

“Nigeria’s senate Friday repeated a demand that an oil partnership led by Royal Dutch/Shell Group (RD, SC) pay $1.5 billion in compensation”


September 3, 2004 10:44 a.m.

LAGOS — Nigeria’s senate Friday repeated a demand that an oil partnership led by Royal Dutch/Shell Group (RD, SC) pay $1.5 billion in compensation to a tribe it says has been harmed by the consortium’s activities in oil-rich Bayelsa state.

“Since we have passed the motion (last week), it must definitely be done,” said Senate President Adolphus Wabara, referring to efforts to force Shell Petroleum Development Co. to pay the amount.

Wabara reiterated that the money would be used to compensate the Ijaw tribe, which he said is facing similar miserable living conditions as the Ogoni tribe, whose welfare he said has been badly affected by SPDC activities.

“You know what happened to the Ogoni people, we don’t want that to repeat,” he said, speaking to reporters at an oil industry workshop.

SPDC withdrew from Ogoni land in 1993, but remains involved in improving conditions, including cleaning up oil spills.

Wabara added that payment of the $1.5 billion should be broken down in proportion to the equity each partner holds in SPDC. This implies that state-owned Nigerian National Petroleum Corp. – which has a 55% interest in SPDC – would be the biggest payer, owing about $825 million.

According to that formula, Shell ‘s contribution would $450 million, in line with its 30% holding in SPDC.

Spokesman Simon Buerk said Shell , the world’s third-biggest listed oil company by sales, has no intention of paying.

He referred to a statement Shell issued in the form of a full-page advertisement in a Nigerian newspaper this week.

SPDC “believes that the order to pay $1.5 billion compensation has no legal basis,” Buerk said.

“In our view, such disputes can only be decided by a court of competent jurisdiction,” he added. “SPDC believes that due process has not been followed.”

Last week, Nigeria’s top energy official, Edmund Dakouro, branded the senate’s move as “illegitimate”, saying the chamber has no executive authority to impose such a fine.

Other members of SPDC include France’s Total SA (TOT), with a 10% interest, and Italy’s Agip SpA (AGI.YY), with a 5% stake.

Company Web site:

– By Vincent Nwanma in Lagos and Michael Wang in London; Dow Jones Newswires, +44-20-7842-9386; [email protected]

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.