Shell loses Nigeria oil license to state company in court ruling

Royal Dutch Shell Plc’s Nigerian enterprise misplaced the best to function an oil web site after a court docket dominated the corporate wasn’t entitled to resume a lease first granted in 1989.

On Monday, the court docket of appeals in Nigeria’s capital, Abuja, overturned a 2019 ruling that granted Shell Petroleum Growth Co. the best to resume its working license for the Oil Mineral Lease 11 subject. These rights will switch to the state-owned Nigerian Nationwide Petroleum Corp.

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“This can be a large victory for the federal government and folks of Nigeria as we now have the impetus to responsibly unlock the oil and fuel reserves the block gives for the advantage of all Nigerians,” Mele Kyari, managing director of NNPC, mentioned in a press release.

Shell was “disillusioned” by the judgment and subsequently filed an attraction, a spokesperson for the corporate mentioned in a press release.

“Although we consider the SPDC JV has fulfilled its obligations beneath the Petroleum Act for the renewal of OML 11, our choice stays to interact the Nigerian authorities on accessible choices for an amicable decision of points across the lease,” the spokesperson mentioned.

The choice comes simply as Shell agreed to pay a local people $111 million in a decades-old oil spill dispute associated to OML 11. Shell faces lawsuits from Nigeria to Europe claiming environmental damages within the Niger Delta.

On the identical time, the power large says it’s within the strategy of exiting its onshore oil place in Nigeria as a result of that now not is suitable with the corporate’s long-term local weather technique. Shell has pumped oil in Nigeria for half a century.

Kyari mentioned additional authorized motion by Shell could be “futile” given the corporate’s “incapacity to work on the Ogoni area of the block for over 30 years.”

An NNPC subsidiary already has taken over the belongings, and operations “are in full gear,” in response to its assertion.

© 2021 Bloomberg

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