The Shell Petroleum Development Company of Nigeria Limited (SPDC) as operator of the SPDC Joint Venture (SPDC JV) carried out exploration and production operations in Ogoniland from the 1950s till the early 1990s.
Production ceased in 1993 following a rise in violence, threats to staff and attacks on facilities. The SPDC JV has produced no oil or gas in Ogoniland since then although one of Niger Delta’s main pipelines, the Trans-Niger Pipeline (TNP), traverses Ogoniland.
In 2012, SPDC transferred operatorship of the JV’s assets in Ogoniland to the Nigerian Petroleum Development Company (NPDC), the production and exploration arm of the Nigerian National Petroleum Corporation (NNPC).
The SPDC JV has five non-producing fields and a network of about 100 wells and associated infrastructure in the area, some of which have been vandalized by third parties.
THE 2011 UNEP REPORT ON OGONILAND
- In 2006 the Federal Government of Nigeria (FGN) commissioned the United Nations Environment Programme (UNEP) to carry out an environmental assessment of Ogoniland.
- The SPDC JV funded the report and provided data as requested. UNEP delivered its report to the FGN in August 2011.
- The report highlighted significant environmental impacts from oil pollution in parts of Ogoniland relating to various causes.
- It called on the FGN, the oil and gas industry and communities to begin a comprehensive clean-up of the region and take coordinated action to end all forms of illegal oil bunkering, crude theft and artisanal refining of stolen crude oil causing oil contamination in Ogoniland.
- Most of UNEP’s recommendations – including the creation of an environmental restoration fund – were directed at the FGN and required it to take the lead in coordinating the activities of the numerous stakeholders involved.
Response by SPDC JV to the UNEP Report
- SPDC welcomed the UNEP Report and remains committed to its implementation under the leadership and coordination of the FGN.
- The report also contained a number of findings and recommendations directed at SPDC as operator of the SPDC JV.
- Since 2011, SPDC has taken action on all the UNEP recommendations addressed specifically to it as operator of the SPDC JV and has completed a majority of the recommendations.
- The 15 SPDC JV sites specifically mentioned in the UNEP report have been re-assessed, and where further remediation was required, those sites have been remediated and certified by government regulators.
- SPDC has completed an inventory and physical verification of assets for de-commissioning and continues to work with its joint venture partners and the FGN to develop a decommissioning plan for these assets.
- S PDC has completed a comprehensive review of its oil spill response and remediation techniques and made a number of improvements in line with industry best practices.
- T he SPDC JV has collaborated with the Rivers State Government to deliver water to impacted communities and constructed several water facilities, which is expected to be upgraded as part of planned activities by HYPREP.
- S PDC has trained contractors on clean-up and remediation techniques and assigned specialist supervisors to a number of project sites to ensure effective oversight and compliance.
- SPDC continues to carry out regular aerial monitoring of all the joint venture’s facilities in Ogoniland, including the creeks and
- pipelines, to identify any new incidents or activities (such as theft and sabotage) which may result in environmental damage. More detailed information on implementation can be found at: http://www.shell.com.ng/sustainability/environment/unep-environmental-assessmen-of- ogoniland.html
Formation of a governance structure to oversee clean-up
- Accelerating implementation of the UNEP Report recommendations was identified as a priority by the Buhari administration in 2015.
- On 4 August 2016 President Buhari inaugurated the Governing Council and Board of Trustees of the Ogoni Trust Fund, established via the Federal Government of Nigeria Gazette of 2016 as part of the Governance process for the implementation of the UNEP Report on Ogoniland being executed by the Hydrocarbon Pollution and Remediation Project (HYPREP).
- The SPDC JV is represented on both bodies and will continue to actively support the clean-up process within the framework established by the FGN. Also, the reformation of the Hydrocarbon Pollution and Remediation Project (HYPREP) under the Ministry of Environment is a positive development aimed at the sustainable clean-up of Ogoniland.
- The UNEP report also recommended the creation of a USD 1 billion Ogoni Trust Fund (OTF), to be co-funded by the FGN, the SPDC JV and other operators in the area.
- The Nigerian Federal Executive Council in December 2016 approved a new gazette for HYPREP under the Ministry of Environment that maintains SPDC JV partners will provide 90% of the US$1 billion (N315.25 billion12) OTF over a five-year period.
- In early 2017, the Ministry of Environment and the HYPREP Governing Council appointed Dr. Marvin Barinen Dekil as Project Coordinator for the implementation exercise and in February 2017, the SPDC JV provided $10 million (N3.03 billion13) to help set up the HYPREP office.
- HYPREP has issued contract award letters for phased remediation activities and is aiming for contractors to be in place in early 2019.
Support of the clean-up by SPDC
- The SPDC JV continues to actively support the clean-up process along with other stakeholders and remains fully committed to providing its share of $900 million (N283.73 billion14) over five years to the OTF as stipulated in the HYPREP gazette and the agreed governance framework.
- The SPDC JV was involved in technical meetings with UN organisations and HYPREP aimed at providing an overall strategy for the implementation of the UNEP Report and provided support to HYPREP in developing work plans and associated budgets.
- In early 2017, the SPDC JV made available $10 million to help set up a HYPREP office.
- In July 2018, the SPDC joint venture deposited an additional $170 million (N51.52 billion15) into an escrow account to fund HYPREP’s activities which completes its first-year contribution of $180 million (N54.54 billion16).
INITIATIVES TO PREVENT CRUDE OIL THEFT AND ILLEGAL REFINING
- The UNEP report also calls for a coordinated effort between government, oil and gas companies and communities to bring an end to all forms of oil contamination in Ogoniland, such as crude oil theft and illegal crude oil refining.
- Crude oil theft and illegal refining continue to be a challenge in Ogoniland with visible evidence of repeated re-contamination of remediated sites.
- The SPDC JV is therefore pursuing a range of initiatives to prevent and minimise the impact of theft and sabotage in Ogoniland, including community-based pipeline surveillance, awareness campaigns and alternative livelihood programmes.
Community-based pipeline surveillance
- In 2014, the SPDC JV signed a series of agreements with communities in Ogoniland –– using the Global Memorandum of Understanding (GMoU) model.
- Under these GMoUs, the SPDC JV provides funding to support unarmed community patrols which report incursions and suspicious activity directly to the government security forces.
- SPDC has reached out to nearly 224 communities in Ogoniland since it embarked on an engagement campaign in 2014 to raise awareness on the environmental devastation from pipeline vandalism and illegal crude oil refining in response to the recommendations of the UNEP Report on Ogoniland.
- The programme involves open-air meetings and publicity campaigns on electronic media and was an appeal to those involved in crude oil theft in Ogoniland and other parts of the Niger Delta to stop destroying their land and heritage through pipeline vandalism.
- In 2016, SPDC collaborated with local community leaders, traditional rulers and state governments in the Niger Delta to raise awareness among youths of the environmental and health risks of interfering with pipelines.
- During the course of that year, engagements centered on the theme of “danger for all and benefit for a few” that crude oil theft
- represents, took place in Ogoniland with more than 40 communities in four local government areas – Khana, Gokana, Tai and Eleme.
- In 2017, the campaign focused on 34 communities located along the Trans-Niger Pipeline corridor in Eleme (Alesa and Eteo), Tai (Kegbara-Kira) and Gokana (Kpor and Biara) Local Government Areas.
- In 2018, eight sessions of a grassroots environmental campaign against crude theft and illegal refining were held at Akpajo, Kpite, B-dere, Bera, Obolo, Nonwa, K-dere and Egbalor communities. Community leaders, women and youths from neighbouring communities also attended the sessions and nearly 5,000 people participated in the campaigns.
Alternative livelihood programmes
- Shell’s flagship youth entrepreneurship programme, Shell LiveWIRE, was extended to Ogoniland in 2014, with the aim of raising livingstandards and reducing crude oil theft through the promotion of alternative livelihoods.
- The programme equips young people with the skills to start their own businesses and create employment.
- It also provides access to essential business knowledge and customized support they need to transform their enterprising ideas into viable and sustainable businesses.
- The pioneer set of 105 beneficiaries graduated in February 2015, and more than 70 per cent of them are now successful business owners and employers of labour.
- As was the case in 2015, 60 Ogoni youths were trained in entrepreneurship skills in 2016. Fifty of the trainees who succeeded in the final assessment received start-up funds for their business ideas.
- In 2017, eighty Ogoni youths took part in the training after which each pitched their business idea to an expert panel of judges.
- The 60 top performing participants were chosen to receive start-up funding totaling more than $65,000 (N19.69 million17) to turn their business ideas into reality.
- In 2018, 100 Ogoni youths from communities near the Trans Nigeria Pipeline participated in training with 80 top performing trainees receiving business start-up funding totalling more than $90,000 (N27.27 million18).
CLEAN-UP AND REMEDIATION OF BODO CREEKS
Memorandum of Understanding with Bodo community
- In 2015, SPDC, on behalf of the SPDC joint venture and the Bodo community, signed a memorandum of understanding (MOU) granting access to SPDC to begin the clean-up of areas affected by two operational spills in 2008.
- The clean-up is to be managed by the Bodo Mediation Initiative (BMI), which includes representatives from the Bodo community, SPDC, the Nigerian government, the Dutch Embassy in Nigeria and other stakeholders.
- The MOU also provided for the selection of two international contractors to conduct the clean-up and to be overseen by an independent project director.
Access challenges from the community
- International contractors for the first phase of the clean-up were mobilised to the location in September 2015, and they trained 400 Bodo youths on clean-up techniques.
- Regrettably, the clean-up process agreed under the BMI was delayed by the Bodo community refusing access to the appointed contractors in 2016 and most of 2017.
- Progress was also frustrated by a series of court actions, initiated in Nigeria by some members of the Bodo community, to stop SPDC from carrying out any clean-up and remediation work at Bodo.
Start of clean-up and remediation
- After engagement with the Bodo community and other stakeholders over two years, beginning in September 2015, managed by the Bodo Mediation Initiative, the first phase of clean-up and remediation activities started in September 2017.
- The clean-up consists of three phases: 1) removal of free-phase surface oil, 2) remediation of soil, 3) planting of mangroves and monitoring.
- The first phase was completed in August 2018 and the contract procurement process for phase two is close to being finalised.
- Should activities continue uninterrupted, phase two (soil remediation) is expected to take approximately two years to complete.
- However, for it to be successful, the repeated re-contamination of cleaned-up sites from illegal third-party activities, such as crude oil theft and illegal refining, must come to an end.
12 — Based on 2016 exchange rate.
13 — Based on 2017 exchange rate.
14 — Based on 2016 exchange rate.
15 — Based on 2018 exchange rate.
16 — Based on 2018 exchange rate.
17 — Based on 2017 exchange rate.
18 — Based on 2018 exchange rate.
More In Briefing Notes
Shell Companies in Nigeria continue to support local content, develop the country’s human resources and strengthen Nigerian contracting capacity. This is achieved through sustainable partnerships, which further the socio-economic development of the Niger Delta and Nigeria as a whole.
Security remains a high priority due to continued crude oil theft and criminality in parts of the Niger Delta. Illegal refining and third-party interference are the main sources of pollution in the Niger Delta today.
Third party interference caused close to 90% of the number of spills of more than 100 kilograms from The Shell Petroleum Development Company of Nigeria Limited operated Joint Venture (SPDC JV) pipelines in 2018.