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OML 11: Shell files appeal case at Supreme Court against NNPC

Royal Dutch Shell Plc’s Nigerian venture has filed a case at a Nigerian Supreme Court against an appeal Court ruling which ruled the company wasn’t entitled to renew an Oil Mining Lease (OML) 11 first granted in 1989.

Last Monday, the court of appeal in Nigeria’s capital, Abuja, overturned a 2019 ruling that granted Shell Petroleum Development Co. the right to renew its operating license for the Oil Mineral Lease 11 field. Those rights will transfer to the state-owned Nigerian National Petroleum Corporation (NNPC).

“We are disappointed by the decision of the Court of Appeal which overturned an earlier decision of the High Court upholding our right to a renewal of Oil Mining Lease 11 for 20 years,” Shell said in a statement seen by Africa’s Oil & Gas report. “We have therefore filed an appeal against this judgment”.

OML 11 has been the subject of prolonged litigation between the Ejama-Ebubu community in Tai Eleme Local Government Area of Rivers State and the SPDC, the operator of the oil concession on behalf of the joint venture partners, including the Federal Government, represented by NNPC’s subsidiary, with 55 per cent.

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“We now have an opportunity to reconstruct a new beginning on OML 11, driven by global best practices and a social contract that would put the people and environment of the Niger Delta above pecuniary considerations”, Shell said.

By choosing to appeal and thereby fight for the right to renewal of the asset all the way to the Supreme Court, Shell has pointedly responded to the statement by NNPC, the state hydrocarbon company, which declared that “further legal action by Shell will not only be futile, it would be depriving Nigeria of an opportunity to make meaningful gains from OML 11 when the nation needs all the revenue it can get to move Nigeria forward.”

Shell says that its preference “remains to engage the Nigerian authorities on available options for an amicable resolution of issues around the lease”, but it believes it has “fulfilled its obligations under the Petroleum Act for the renewal of OML11”.

The decision comes just as Shell agreed to pay a local community $111 million in a decades-old oil spill dispute related to OML 11. Shell faces lawsuits from Nigeria to Europe claiming environmental damages in the Niger Delta.

At the same time, the energy giant says it’s in the process of exiting its onshore oil position in Nigeria because that no longer is compatible with the company’s long-term climate strategy. Shell has pumped oil in Nigeria for half a century.

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