Residential area in Ogoniland, Rivers State

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 UNEP Report

Background

In 2006 the Federal Government of Nigeria 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 Federal Government of Nigeria in August 2011.

The report highlighted significant environmental impacts from oil pollution in parts of Ogoniland relating to various causes. It called on the Federal Government of Nigeria, 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.

Response by SPDC JV

Most of UNEP’s recommendations – including the creation of an environmental restoration fund – were directed at the Federal Government of Nigeria and required it to take the lead in coordinating the activities of the numerous stakeholders involved. SPDC welcomed the UNEP Report and remains committed to its implementation under the leadership and coordination of the Federal Government of Nigeria. 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 Federal Government of Nigeria to develop a decommissioning plan for these assets.
  • SPDC 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.
  • The SPDC JV has delivered the emergency measures identified by the report related to providing safe drinking water to impacted communities in collaboration with Rivers State Government.
  • SPDC 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

Developments since 2016

Accelerating implementation of the UNEP Report recommendations was identified as a priority by the Buhari administration in 2015. To this end, on 2 June 2016, the clean-up process was launched at Patrick Waterside in Bodo by the Federal Government of Nigeria. On 4 August 2016 President Buhari inaugurated the Governing Council and Board of Trustees of the Ogoni Restoration Fund (ORF) which will oversee and fund the clean-up process under the UNEP Report.

The SPDC JV is represented on both bodies and will continue to actively support the clean-up process within the framework established by the Federal Government of Nigeria. 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 Environmental Restoration Fund, to be co-funded by the Federal Government of Nigeria, 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 million1) ORF 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 billion2) to help set up the HYPREP office. In the same month, a ground-breaking ceremony took place for an Integrated Contaminated Soil Management Centre (ICSMC). The SPDC JV will work closely with the Project Coordinator and the ICSMC, which we believe will help create employment opportunities in Ogoniland and facilitate the acquisition of skills in the treatment of contaminated soils. HYPREP has also embarked on intensive sensitisation campaigns with key Ogoni stakeholders including illegal crude oil refiners and conducted medical outreach programmes in four local government areas.

In late 2017, the HYPREP Governing Council gave consent to fund short term items by HYPREP worth about $33 million (N9.99 billion3), such as emergency water supply, scoping of contaminated sites and alternative livelihood programmes. By the end of 2017, HYPREP had completed nine technology trials in selected UNEP recorded sites and one at Korokoro well-3 was particularly successful. During the assessment and remediation trial at this well, it was deemed necessary to remove free phase oil at levels deeper than 3 metres.

SPDC remains fully committed to providing its share of the ORF as stipulated in the HYPREP gazette and the agreed governance framework. We encourage all relevant stakeholders to also remain committed to contributing their share to the ORF. SPDC continues to look forward to working collaboratively with HYPREP and other government and non-government stakeholders to ensure the clean-up process established by the Federal Government of Nigeria succeeds. To this end, during 2017 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. SPDC also participated in sessions providing support to HYPREP in developing work plans and associated budgets.

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. It is encouraging that the Federal Government, through HYPREP is tackling the serious issue of recontamination by oil theft and illegal refining, as it prepares for the clean-up of crude oil in Ogoniland.

Regardless, 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.

  • 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 nearly 184 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 a clarion call 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 the youth 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.
  • Shell’s flagship youth entrepreneurship programme, Shell LiveWIRE, was extended to Ogoniland in 2014, with the aim of raising living standards 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 percent of them are now successful business owners and employers of labour.
  • A s was the case in 2015, 60 Ogoni youth 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 youth 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 million4) to turn their business ideas into reality.
  • An Agricultural Youth Entrepreneurial Programme was also initiated in 2015 to increase youth participation in farming, the primary occupation in Ogoniland with associated economic growth.

Memorandum of Understanding with Bodo Community

In 2015, SPDC on behalf of the SPDC JV and the Bodo community signed a memorandum of understanding (MOU) granting SPDC access to begin the clean-up of areas affected by two regrettable 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 contractors to conduct the clean-up and to be overseen by an independent project director.

International contractors for the first phase of the clean-up were mobilised to the location in September 2015, and they trained 400 Bodo youth 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. Also, this area has subsequently been re-impacted by oil theft and sabotage activity. 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.

SPDC is pleased that after significant engagement in 2016 and 2017 with the communities and other stakeholders managed by the BMI, the clean-up and remediation activities commenced in September 2017. The clean-up exercise will consist of four phases:

  1. clean-up of free-phase surface oil,
  2. remediation of soil,
  3. restoration of mangroves and
  4. monitoring. Should activities continue uninterrupted it is expected to take approximately three years. Phase 1 of the clean-up is expected to be completed in early 2018 as per plan.

However, for clean-up and remediation to be successful, the repeated re-contamination of cleaned-up sites due to crude oil theft and illegal refining must end. A coordinated approach among all stakeholders, particularly federal and state government agencies is essential to address the ongoing problem of re-pollution.

1- Based on 2016 exchange rate.

2, 3, 4- Based on 2017 exchange rate.

More In Briefing Notes

Nigerian Content Development

Shell Companies in Nigeria continue to support local content, develop the country’s resources and strengthen Nigerian contracting capacity.

Security, Theft, Sabotage and Spills

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.