Shell Plc has been stopped from selling any of its assets in Nigeria by a Nigerian court of appeal in Owerri until a decision has been made on its almost $2 billion penalty appeal for an alleged oil spill.
This follows the declaration of force majeure on Bonny Light crude oil exports on Monday by Shell Petroleum Development Company of Nigeria (SPDC), a local subsidiary of Shell Plc. The energy firm said the force majeure is effective March 3, due to a slump in flows to the export terminal.
A panel of three judges said Shell, acting through its agents or subsidiaries, was restrained from “selling, allocating, vandalising or disposing off any of its assets/properties” pending the determination of the appeal.
A report by Reuters, quoting a copy of a court ruling issued on March 11, shows that Shell was ordered to deposit the money in an account controlled by the court within two working days.
The energy firm’s appeal hearing is set to begin on May 5.
A spokesperson for Shell’s Nigeria unit said the company would immediately appeal the decision, Reuters reported.
“We are disappointed at this outcome. We have a strong belief in the merit of our case and will take immediate steps under the law to appeal and stay the execution of the decision until the appeal is determined,” the spokesperson said.
Shell started talks with the Nigerian government last year about selling its stake in Nigeria’s onshore fields, where it has been active since the 1930s, as part of a global drive to reduce its carbon emissions.
Last year, it agreed to pay a Nigerian community $111.68 million to settle a case of oil spill that took place more than 50 years ago.