The combat against climate change around the world has caused major oil companies to sell off polluting assets. Shell’s annual reports revealed that since the past eight years divestments in Nigeria and other countries has significantly contributed to the decrease in the greenhouse gas emissions owned by the company; the company is also working towards complete exit of Nigeria’s onshore market. Shell’s withdrawal is regarded as one of the many withdrawals of global energy companies, which made Nigeria the largest oil producer in Africa, from the Niger Delta.
According to interviews conducted with local officials, residents and environmental groups, the divestments made in Nigeria in the last ten years has sprouted negative effects in communities that Shell and other top energy companies are withdrawing from and previously claimed to ensure protection. Environmental experts also stated that local oil companies that purchased the Niger Delta assets from top international companies have been unable to provide quick responses to oil spills in communities like Nembe.
Emergence of these companies increased cases of greenhouse gas emissions.
Data from flare tracker Capterio and reports gathered by the Environmental Defense Fund and Stakeholder Democracy Network has shown that the emergence and dominance of Nigerian companies has led to drastic increase in diverse cases of greenhouse gas emissions due to gas flaring (the burning off of a byproduct of oil extraction). Several analyses have also proven that data regarding these consequences are hard to come by as the local companies enact fewer reporting standards and are said to make very few environmental commitments.
When the Aiteo Group, a Nigerian company, acquired Shell’s local oil license in 2015, there was joy amongst Niger Delta residents as they believed their needs would be understood but the current situation is not the case. Villagers from the Nembe area of Niger Delta said that there was oil spillage for more than a month in a route where villages emerge from the thick mangrove swamps before the intervention of a local company to stop the leak. A year and three months after the clean-up of the oil spillage, there was still an oil sheen coverage on town’s water and black cloaks around mangrove roots.
Niger Delta is one of the most polluted places on earth — UN.
Oil exploration in the Niger Delta started in the 1930s with Shell. In 1958, when Nigeria was yet to gain independence, the international oil company exported its first barrel of oil. Afterwards, other major international oil firms like Total Energies, ExxonMobil, Eni and Chevron came into the country with federal arrangements that benefited the state and oil companies but not the average Nigerian. Resultantly, the United Nations regarded the Niger Delta as one of the most polluted places on earth.
Etienne Kolly, associate director at S&P Global Commodity Insights, said that the first wave of divestments by international companies began in 2010. There was a huge threat posed by oil theft — an act done by gangs and militants; also, the Nigerian government was requesting more local ownership of the oil industry. An analysis by the Britain-based research and consulting firm Wood Mackenzie stated that in 2020, divestments in Nigeria attained a total of $1.1 billion. In the same year, there was a decline in the country’s oil production, with Angola replacing it as the largest oil producer in Africa.
Aiteo increased production but declined in infrastructure maintenance.
Although Shell did not fulfill all its promises in Nembe, Niger Delta, there was an annual conduction of inspection and maintenance on its infrastructure, with an inclusion of the well close to the village. On the other hand, the emergence of Aiteo brought about a threefold increase in production within the first year of its operation. While there was an extensive focus on production, there was a drastic decline in maintenance. There was an oil spillage into the Santa Barbara river which took Aiteo one month to stop. Experts claimed that about 500,000 barrels of oil and gas were spewed. The local company blamed the spillage on sabotage but Nigerian regulators affirmed that it was caused by faulty to infrastructure.