Shell’s divestments in Nigeria help the company meet its green goals. But villagers and watchdogs say conditions have worsened after the sales.
TWP by Rachel Chason, March 27, 2023
NEMBE, Nigeria — When Lambert Ogbari learned that the oil giant Shell was selling its local operations to a Nigerian firm, he said he felt hopeful his living conditions would finally improve. But he quickly noticed that maintenance on the oil wells surrounding his village had declined.
Then, one night, Ogbari woke up to a loud bang, followed by the smell of gas. Crude oil was shooting out of a well near his home with such force that people hundreds of yards away could hear the roar.
As the world wrestles with climate change, major oil companies are selling off polluting assets around the globe. Shell, which announced in 2021 that it is looking to exit Nigeria’s onshore market completely, has repeatedly said in annual reports over the past eight years that divestments in Nigeria and elsewhere have played an important role in decreasing the company’s own greenhouse gas emissions. Shell’s withdrawal is part of an exodus by some of the world’s top energy companies from the Niger Delta, which had long made Nigeria the largest oil producer in Africa.
But interviews with residents, local officials and environmental groups show the divestments made in Nigeria over the past decade have had negative consequences for communities that Shell and other international companies leave behind — and for the environment they say they are aiming to protect.
Local companies that have acquired the Niger Delta assets from international firms have failed to respond quickly to oil spills such as the one in Nembe, environmental activists say. Greenhouse gas emissions from gas flaring — the burning off of natural gas, a byproduct of oil extraction — have increased dramatically in multiple cases after Nigerian companies took over, according to data from flare tracker Capterio and reports by the Environmental Defense Fund and Stakeholder Democracy Network. At the same time, according to several analyses by these two groups and others, information about those effects has become scarce, because the local companies tend to make fewer environmental commitments and set fewer reporting standards.
In the Nembe area, where villages emerge from the thick mangrove swamps, oil sprayed for more than a month before the local company stopped the leak, villagers recalled. On a recent afternoon, 15 months after the spill was cleaned up, nearby water was still covered with an oil sheen, and mangrove roots were cloaked in black. Fishermen are still catching just a tiny fraction of what they once were, Ogbari said, his voice raised in anger, and locals say they have seen their already poor health deteriorate.
“We were excited to see our brothers in control,” Ogbari said, referring to the purchase in 2015 of Shell’s local oil license by the Aiteo Group, a Nigerian company. “We thought they would understand our needs. … But it has gone from bad to worse.”
Rethinking Nigeria’s oil
The Niger Delta’s history with oil began in the 1930s, when Shell started exploration here. Shell exported its first barrel of oil in 1958, when Nigeria was still a British colony. Oil giants including ExxonMobil, Chevron, Eni and Total Energies arrived in Nigeria over the years that followed, entering into arrangements with the government that proved extremely lucrative for the state and oil companies but did little for average Nigerians. The Niger Delta, according to the United Nations, became one of the most polluted places on Earth.
The international companies began a first wave of divestments around 2010, according to Etienne Kolly, associate director at S&P Global Commodity Insights. Oil theft by gangs and militants was proving a massive headache, and Nigeria’s government was pushing for more local ownership in the industry.