Report highlights environmental and financial risks, calls for responsible transition.
In a newly released report by the Dutch NGO the Centre for Research on Multinational Corporations (SOMO), Shell’s divestment from onshore oil operations in the Niger Delta has been labelled as reckless and irresponsible.
The report sheds light on the company’s failure to address the extensive pollution it has left behind and the looming risks associated with decommissioning abandoned infrastructure.
The report titled “Selling Out Nigeria – Shell’s Irresponsible Divestment” underscores the severe environmental impact of Shell’s operations in the Niger Delta.
Despite claims of cleanup efforts, petroleum-contaminated rivers and polluted land continue to devastate the lives and livelihoods of millions in the region. The certification process used by Shell to assert its cleanup activities has been deemed flawed and unreliable.
Moreover, Shell’s divestment strategy has raised concerns about the safe decommissioning of abandoned infrastructure, described as “a ticking time bomb” by SOMO.
The company’s sale of assets to various investors, many of whom lack the financial stability and commitment to address decommissioning, further exacerbates the risk.
Audrey Gaughran, Executive Director of SOMO, criticised Shell’s actions, stating, “Shell has pulled off the ultimate Houdini act.
“As the oil industry enters its final phase, whether that’s in the next 5 years or 25, Shell has sold its toxic assets and will not be left holding them when the music stops,” Gaughran continued.
“Shell has profited from oil extraction for decades, and in doing so, has made the Niger Delta one of the most oil polluted places on Earth, leaving communities to face the dire consequences that will remain well beyond the lifetime of the industry.”
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The complexity of Shell’s divestment process has also come under scrutiny in the report.
The company’s sale of assets to newly created companies, some of which have opaque backgrounds and involve unstable investors, raises questions about the adequacy of due diligence measures.
“We found that some of the new companies appear to be crude investment exercises, backed by investors who appear to have no interest in the situation of the Niger Delta and only in making as much money as possible while they can,” Gaughran explained.
The departure of Shell from the Niger Delta, where it has been a dominant operator for decades, poses challenges for thousands of communities and raises doubts about the fairness of the energy transition process.
Gaughran emphasised the need for accountability, stating, “Ensuring that the historical pollution, the lack of funding for safe decommissioning and poor financial transparency are fully addressed in Nigeria will be an important litmus test for a just energy transition across the world.”
In response to these concerns, civil society organisations in the region have proposed new principles for responsible oil and gas industry divestment.
These principles aim to ensure transparency, meaningful community consultation, and environmental remediation in all divestment deals.
“The international oil companies are divesting at an accelerated rate — and the report highlights that the process is inadequate,” said Florence Kayemba, Country Director at Stakeholder Democracy Network, one of the organisations in formulating the new principles.
“There will be no ‘just energy transition’ under this regime,” she continued.
As Shell faces backlash over its handling of divestment in the Niger Delta, calls for greater accountability and responsible transition measures are growing louder.
The company’s legacy in the region hangs in the balance as communities continue to grapple with the aftermath of decades of environmental degradation.