Shell slapped with $5bn fine

2012-07-17 12:57

Nigeria has slapped a $5 billion (about R41 billion) “administrative penalty” on Shell over an oil spill last year at an offshore field.

Shell was forced to halt operations at the Bonga oilfield in the Gulf of Guinea following the leak on December 20 last year that spilled some 40 000 barrels of crude into the sea.

Nigerian authorities have levelled a $5-billion fine on Shell’s local operation for the spill, the head of the state-run National Oil Spill Detection and Response Agency, Peter Idabor, told a parliamentary hearing yesterday.

Idabor said the “administrative penalty” on Shell Nigeria Exploration and Production Company (Snepco) was in line with international industry practice.

But Shell spokesperson Tony Okonedo said the fine was unwarranted as the company had acted quickly to contain the spill.

“We do not believe there is any basis in law for such a fine. Neither do we believe that Snepco has committed any infraction of Nigerian law to warrant such a fine,” Okonedo told AFP.

“Snepco responded to the 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,” he said.

Shell can contest the penalty in court.

Officials said the incident was Nigeria’s worst offshore spill since a 1998 Mobil incident, though onshore leaks are a common occurrence in the oil-producing Niger Delta.

Bonga, which has a capacity of 200 000 barrels per day, is located some 120km off the coast of Nigeria, Africa’s largest oil producer and an OPEC member.

Nigeria has been producing between 2.0 and 2.4 million barrels per day of crude in recent months.

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