Communities in the Nembe area have issued a caveat emptor notice to potential investors seeking to buy the stake of Shell and its joint venture partners in OML 29 and the Nembe Creek vital pipeline. The communities are alleging that there are unresolved liabilities with Shell. They say that Shell has failed to pay over $1 billion in compensation that it has demanded for environmental damage arising from their operations. They say that Shell has failed to make restorative payment for damage inflicted over 50 years of oil exploration in the Nembe Kingdom.
Chairman of the Nembe Oil and Gas Committee, Chief Nengi James, said in a statement: “It is imperative that the new investors start on a clean slate by insisting that Shell should dispense with all liabilities arising from their operations to avoid running into conflict with the host communities early in their operations.”
Explaining the position of the community, James stressed that Nembe people were peaceful and wished potential investor peaceful operations in the area. However, he warned that a cordial welcome would not be given to investors unless the Nembe people are involved in any discussions over compensation for huge damage done to the community by Shell’s operations.
Industry watchers have long advocated increased indigenous participation in the industry as indigenous companies are likely to be much more sensitive to communities. It is generally expected that there will be better relationships and engagement between host communities and indigenous companies. The international oil company (IOC) divestments creates opportunities for indigenous companies to significantly upscale their involvement in exploration and production and it is hoped that as such involvement increases, clashes between operators and host communities will decline in view of improved relationship and understanding between them.
