Oil giants fleeing their ‘crime scene’ after overseeing decay

In a move resembling an organised crime syndicate, oil companies are fleeing from the Niger Delta after reaping billions of dollars in profit and leaving an environmental disaster in their wake.  

Writing in International Politics and Society journal, Zikora Ibeh, a researcher, columnist, podcaster and development advocate, noted.

“Fossil fuel supermajors operating in Nigeria’s oil industry are scrambling to ditch their crime scene, the Niger Delta, from which they have been drilling the black gold with devastating effectiveness for 60 years, in order to start afresh somewhere else”.

By doing so, she adds, they would be abandoning millions of locals and villagers to deal with the colossal pollution and environmental degradation they are leaving behind.

The divestment moves which started in 2010, came to a head last October when four international oil companies (IOCs) secured regulatory approval to unburden their oil mining licences to local players.

French-owned TotalEnergies sold its stake to Chappal Energies in an oil and gas deal worth US$860 million. Italian oil major Eni offloaded its interests in four onshore oil licences, exploration concessions and power plants to Oando in a US$500 million deal.

Norway’s majority state-owned Equinor handed over a large part of its stake in oil fields to Chappal, while American multinational ExxonMobil, concluded a US$1.3 billion asset sale to home-grown Seplat.

In exchange for giving up their onshore holdings, consisting mostly of high-risk oil wells and pipelines, the supermajors are moving the drilling to deep-water oil fields on the Gulf of Guinea, which reportedly holds 13 billion of the country’s 37 billion barrels of proven oil reserves.

“Here, they hope that scant regulation and considerable distance from human habitation will help them avoid liability for oil spillage and pollution,” Ibeh explains.

Nigeria oil industry leader Royal Dutch Shell has not been lucky, however, after finding itself in the unenviable position of being the last to escape the “crime scene”. Although the oil giant got ministerial approval last December for its planned asset sale, regulatory authorities are stalling due to protests by oil-producing communities and activists.

Worth a whopping US$2.4 billion, the disinvestment will see Shell give up its oil licences holding an estimated 6.73 billion barrels of oil and condensate, and 56.27 trillion cubic feet of gas to Renaissance Africa Company Limited, effectively ending Shell’s nearly one-century dominance of Nigeria’s energy sector.

Industry scion

Nigeria’s federal government is spilt on this decision. In early February, the National Assembly passed a resolution stopping the divestment until IOCs meet environmental and social obligations, but President Bola Ahmed Tinubu holds a different view.

“With a flourishing career as an accountant in Mobil Nigeria before joining partisan politics in 1992, Tinubu is a scion of the fossil fuel industry. It is hardly a coincidence that Oando, which purchased US$500 million from Eni last year, is owned by Tinubu’s nephew, Adewale Tinubu,” says Ibeh.

According to Ibeh, the high-wired intrigue attending Shell’s divestment process, which has seen Tinubu, the de facto Minister of Petroleum, brazenly discountenance multiple voices of opposition, is a sign of the enduring powers oil supermajors continue to wield over the Nigerian state and society.

The discovery (during British colonial rule) of crude oil at commercial quantity by Shell D’Arcy, as Shell was known then, in Oloibiri District, Brass Division, transformed Nigeria into a petrol state.

“Like bees to honey, politicians and gun-toting army generals fell on the largesse as Nigeria’s national purse expanded geometrically. From then on, the oil giant has become a permanent fixture of the narrative of state capture in Nigeria,” she notes.

When in 1994, nine Ogoni activists, including the globally-acclaimed poet and environmental activist Ken Saro-Wiwa were executed by the late dictator, General Sani Abacha, for campaigning against Shell’s destruction of the environment, no one needed convincing that the oil giant had blood on its hands.

Three decades after those bloody events, oil supermajors like Shell still continue to wield enormous influence in the Nigerian state, using a combination of bribes to buy support and violence when everything else fails.

Villagers whose farmlands and fishing waters are despoiled know better than to expect swift justice, given Nigeria’s long history of negligence in addressing environmental injustice, hence the increase in lawsuits against oil majors in overseas jurisdictions.

For instance, in a bid to hold Shell and its Nigerian subsidiary SPDC accountable, thousands of members of the Ogale and Bille communities have taken the oil giant to court in the United Kingdom over decades of oil spills. The trial began on 13 February and continues until 10 March.

The emerging situation in Nigeria highlights how energy transition without social justice can hurt frontline communities in the Global South who have borne a disproportionate burden of the climate crisis.

From a vital mangrove, freshwater and biodiversity ecosystem, over half a century of crude oil exploration has transformed Nigeria’s Niger Delta into an ecological wasteland. Today, the area is better known as one of the most polluted places on Earth.

Since 1958, an estimated 13 million barrels (1.5 million tonnes) of crude oil have been spilled from over 7,000 oil spill incidents. The resulting pollution has affected farmlands, groundwater and streams from which farmers and fishermen eked out a living, rendering millions jobless and destitute.

Health concerns

Even now, as many as 240,000 barrels of crude oil are spilled in 300 incidents annually in the Niger Delta. Constant exposure to hazardous and highly toxic chemicals from the crude oil released into the soil and the atmosphere through gas glaring has compromised the health of many and is the leading cause of child mortality.

Official records indicate many children don’t make it past their fifth birthday, while those who do have little prospect of seeing their hair grey. At 41 years old, life expectancy in the Niger Delta is at least 10 years lower than the national average.

Several efforts, including landmark judicial pronouncements demanding the clean-up of the Niger Delta have been scorned by Big Oil, and only in a few cases did victims of ecocide ever got any compensation.

Ibeh says all the divestments didn’t have a comprehensive asset integrity review or any clear plan by regulators to ensure that all environmental damage due to the seller’s operations is cleaned up and fully remediated before the sale is approved.

Oil-producing communities consider the divestment move a ploy by oil supermajors to evade responsibility for millions of dollars of liability for environmental, health and livelihood destruction. Many local companies buying assets are new, with no known track record, raising concerns about their capacity to handle the liabilities left behind.

Some of the licences being offloaded are high-risk mature assets at the end of their productive life and in urgent need of decommissioning, Ibeh writes.

“The divestment process reflects the unfolding dynamics of Nigeria’s resource curse where the rabid lust for profit by oil supermajors has made them blind to all reason and decency in their brutal extractivism,” she adds, noting that the absolute lack of enlightened national self-interest by the Nigerian state offers a unique insight into the contrivance of neo-colonial happenstances that continue to keep Africa’s largest crude oil producer prostrate decades after the discovery of the black gold.

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