Tuesday, August 16, 2011

Shell will pay $410 million to Nigeria's Ogoniland for oil spills

LONDON - In the first case of its kind, a British high court sitting in London has ordered oil major Royal Dutch Shell to pay compensation of potentially more than £250 million (US$410 million) to the Bodo community of Rivers State, after the Anglo-Dutch oil group admitted liability for two spills around the community, following a class-action lawsuit brought in England by the Niger Delta community.

Martyn Day of the London-based law firm Leigh Day & Co. represented the Bodo community and brought the legal claim for damages against Royal Dutch Shell plc. (RDS) and its subsidiary, Shell Petroleum Development Co. (Nigeria) ltd. (SPDC).

It was the first time the companies faced claims in England for damages resulting from their operations in Nigeria.

The lawsuit was filed in England in April over two oil leaks in 2008 and 2009 that caused devastating damage to the environment and the waterways - in particular to the fishing community of Bodo.

Shell said it was informed of the first leak in early October 2008, but the Bodo community countered that at the time of the leak the company had pumped oil for about six weeks. Even then it took Shell over a month to repair the weld defects in one of its pipelines which had resulted in oil leaks into the community at an estimated rate of 2,000 b/d.

The oil spill caused massive contamination in the creek, rivers and waterways in the Bodo area, as well as the mangroves, causing devastating pollution to the entire area. The damage was estimated to have affected about 20 square km. of Gokana local government area of Rivers State.

A further spill occurred in December 2008, due to equipment failure. It was not capped until February 2009, when greater damage had been inflicted upon the creek, as tens of thousands of barrels of crude oil were pumped into the surrounding rivers and creeks.

The amount of oil spilled is estimated to be as large as the spill that caused the Exxon Valdez disaster in Alaska in 1989. The size of the coastline affected is equivalent to that damaged by the BP Deepwater Horizon spill in the Gulf of Mexico in 2010.

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