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Shell could face huge fine for Nigeria spill
Nigerian agency tells parliament oil giant should pay $5bn for environmental damage caused by offshore leak last year.
Last Modified: 17 Jul 2012 19:31
Shell temporarily shutdown its Bonga facility after a leakage of about 40,000 barrels of oil last December[Reuters]

Nigerian regulators have told parliament that Royal Dutch Shell, the Netherlands-based oil and gas company, should be fined $5bn for environmental damage caused by an oil spill at its offshore Bonga field last December.  

Shell said on Tuesday there was no legal basis for the proposed fine.

The country's National Oil Spill Detection and Response Agency (NOSDRA) told a parliamentary committee on Monday that although last year's spill, estimated at about 40,000 barrels, was contained offshore, there was a serious environmental threat.

NOSDRA said that the leakage was caused by a failure in Shell's oil export hose. 

"The spilled barrels impacted approximately 950 square kilometres of water surface, affected a great number of sensitive environmental resources," NOSDRA said before the environment committee of the national assembly.

"It has a direct social impact on the livelihood of people in the riverine areas whose primary occupation is fishing."

Shell said that last December's spill happened while a tanker was loading oil, leading to the complete shutdown of the company's Bonga facility. Production restarted in January. 

"We do not believe there is any basis in law for such a fine. Neither do we believe that SNEPCo [Shell Nigeria Exploration and Production Co] has committed any infraction of Nigerian law to warrant such a fine," Shell said on Tuesday.

"SNEPCo responded to this incident with professionalism and acted with the consent of the necessary authorities at all times to prevent environmental impact as a result of the incident."

Bonga accounts for around 10 per cent of monthly oil flows from Nigeria, the continent's largest exporter of crude oil. 

Oil spills are common in the mangrove creeks onshore Nigeria. Many are caused by sabotage strikes or oil thieves tapping into easily accessible pipelines. Several communities have taken Shell to court over a failure to clean up spills.

A United National Environment Programme report last year said that Shell was not doing enough to clean up spills and maintenance of infrastructure was inadequate.

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