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Shell and Eni Struggle To Control Oil Spills In Nigeria

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By: MICHEAL KAUFMAN
Published: Mar 20, 2015 at 9:35 am EST

As reported by Bloomberg, Amnesty International has indicated that Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and Eni SpA (ADR) (NYSE:E) are finding it difficult to control the oil spills in Nigeria. Amnesty International asserted that both companies have been involved in over 550 oil spills in the Southern Niger Delta River. This is much higher than the average of ten oil spills per year in Europe from 1971 to 2011.

Nigeria is regarded as one of the major crude oil producers. According to Bloomberg, the country records daily production of two million barrels. Hence, it has attracted the attention of many major energy companies. The oil spills are a major source of concern for the residents of the country. The Nigerian community believes that oil spills lead to serious environmental concerns. The fisherman community, in particular, feels that the spills are damaging the fishing villages in the Niger Delta.

The oil companies hold the belief that a majority of the spills are caused by oil theft and sabotage in the Niger Delta.

Bloomberg further reported Audrey Gaughran, the global issue director of Amnesty International, claiming the situation to be alarming. He said if these oil spills had occurred in any other country, an emergency would have been declared. However, this appears to be a standard operating procedure for the oil industry in Nigeria.

In 2014, Eni SpA was responsible for 349 oil spills. A year earlier, the Roma-based company had reported 500 oil spills. Amnesty International feels that Eni should be investigated for negligence.

The largest crude oil producer in Nigeria, Shell, was responsible for 204 oil spills in the region. The company received significant criticism for two of oil spills in January 2008. Last year, the company agreed on paying $81 million to the Bodo community, who were affected by the spill. The company fought a three-year battle with the community before finally agreeing to pay the amount.

SOURCE

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