By Emmanuel Daudu
The National Civil Society Council of Nigeria, NCSCN, in discharging it’s watchdog duty in the Nigerian community has torch lighted and brought to limelight the secret deal of SHELL trying to sell off its company to Renaissance Consortium and that the acquirer will be expected to take over responsibility for dealing with issues related to oil spills, theft and sabotage.
The Executive Director of the Council, Blessing Akinlosotu, while addressing journalists in a Press Conference in Abuja held on Tuesday, January 23, 2024 on the Divestment Deal Of SHELL Petroleum Development Corporation (SPDC) With The Renaissance Consortium stated that the position of the Civil Society Community says no to Divestment Deal, as currently being pursued by SHELL, and hereby issues a firm warning that any attempt to ignore its positions and conditions, and to proceed in the execution of the Divestment Deal without satisfying the interest of the Nigerian People shall be met with stiff resistance and nationwide protests, with occupation of all SHELL Offices and that of all involved Parties indefinitely.
“This Matter Directly Affects Our Economy, Hence, The Well-being Of The People”, Blessing said.
While giving a background details in his speech, he said, “NCSCN is aware that the Crude Oil business remains highly profitable, and oil companies follow the investors ‘money. Across the world, Oil companies are divesting from – and investing in – oil projects. This seemingly incoherent position makes perfect business sense if your calculus is based on profit and shareholder value.
“According to Shell, Renaissance will be expected to take over responsibility for dealing with issues related to oil spills, theft and sabotage. This statement is an indictment on SPDC, suggesting that they created some of the issues and are involved in some. It is the responsibility of SPDC to restore the environmental status of its operational areas.
“We noticed that SPDC is diverting the onshore businesses and still holding the offshore because we can monitor their activities and the level of contamination towards bringing them to answer.
“We frown at this ploy to avoid paying up for decades of pollution and evading justice. We must stop this attempt to cause the laying-off of workers. This will create unemployment and corresponding restiveness.
“We doubt the sincerity of purpose expressed by SPDC: though we agree that the business in the petroleum industry remains profitable, we question the reasons for divesting some of their assets in Nigeria. A Look at what is being divested will notice old, crude theft high-risk oil assets, and unprofitable assets that in the not-too-distant future will be considered “stranded assets”. A critical feature of potentially stranded assets is not who owns them now but who can be persuaded to buy them now, and the new owner holds full responsibility for the liabilities of the former.
“It is no secret or news that Nigeria runs almost a mono-economy revolving around the Oil and Gas Industry. Hence, the need for continuous surveillance of the activities and developments within this sector by the Civil Society Community cannot be overemphasised.
“The National Civil Society Council of Nigeria (NCSCN) have observed with serious Concerns and Reservation, the hurried attempts by SHELL Global to sell off huge Onshore and shallow water assets to a Special Purpose Vehicle (SPV), known as the Renaissance Consortium made up of ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin. Petrolin, Aradel, Waltersmith and First E&P formed ND Western which was first used by SHELL as Special Purpose Vehicle to manage OML 34 an asset bought from it in 2012.
“It has come to the knowledge of the Council that SHELL has reached an agreement to sell its onshore Nigeria business to a group of five {5} local companies under Renaissance for $1.3 billion.
“SPDC owns 15 licences onshore and three in the shallow water, OML 74, 77 and 79. It has 458 million barrels of oil equivalent in proved reserves, as of the end of 2022. The sale deal will allow SHELL to focus on deep-water Oil and gas – including its retained stake in Nigeria LNG (NLNG).
“Therefore, Renaissance will acquire Shell Petroleum Development Co. (SPDC) in the following Deals conditions; In addition to the $1.3bn paid, Renaissance will pay up to $1.1bn, on receivables and cash balances for the business. The joint venture will pay most of this on completion. On closing, Shell will provide $1.2bn in secured loans. It will also provide additional financing of $1.3bn in the future to cover the development of feed gas for NLNG and its share of “specific decommissioning and restoration costs.
SPDC staff will continue to be employed by the company as the ownership changes occur. Shell will also play a role in managing SPDC facilities that provide gas to NLNG.
NCSCN’S POSITION ON THE ABOVE-STATED ISSUE:
“As an Organization, we consider this deal as an unclean criminal getaway by SHELL from Nigerian, environmentally damaging Niger Delta further, leaving behind monument atrocious situations, liability, high remediation cost of polluted environment, and compensation fees.
In the same vein, there are also serious issues of abandonment, decommissioning, and relinquishment costs associated with ageing Assets and Environmental disasters already happening in the Niger Delta.
“NCSCN thinks that there are a plethora of pending court cases by Stakeholders, Farmers, and Host Communities against SPDC, which they are running away from through these Divestment deals by transferring these Liabilities to the new Owners, who may not have the capacity to address and solve these years of criminal neglects and environmental injustice Environmental experienced by particularly the Niger Delta people and the Nigerian population through heightened exposure to pollution and corresponding health risks, limited access to adequate environmental services, and loss of land and resource rights.
“The patriotic intentions of NCSCN are to categorically put a Caveat Emptor, that is a BUYERS BEWARE notice and CALL on the Nigerian Government through the Regulatory Authorities to decline approval of the deal pending when Civil Society Council based on the adopted National Principle on Divestment, must have undertaken independent visits to host communities to ascertain the level of compliance with Nigerian and international laws on Divestment, Abandonment and Decommissioning.
“Secondly, SHELL must show publicly, credible and verifiable evidence that the issues of Abandonment, Decommissioning, and Relinquishment cost and proper compensation have been duly settled and filed before Nigerian Regulatory Authorities.
“Thirdly, the consortium must show it has the Technical expertise, modern Technologies to mitigate negative Environmental impact and enough Financial Capacity to continue investment and production activities on the Assets”, he added.
Africa Security Investigation News 