Shell faces $5 billion fine over Nigeria Bonga oil spill

Tue Jul 17, 2012 2:39pm EDT
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By Joe Brock and Camillus Eboh

ABUJA (Reuters) - Nigerian regulators have told parliament that Royal Dutch Shell (RDSa.L: Quote) should be fined $5 billion for environmental damaged caused by an oil spill at its offshore Bonga field, one of the biggest in the history of Africa's largest energy industry.

Shell said on Tuesday there was no legal basis for the proposed fine.

The National Oil Spill Detection and Response Agency (NOSDRA) told a parliamentary committee on Monday that although last year's spill, estimated at around 40,000 barrels, was contained offshore, there was a serious environmental threat.

NOSDRA said the spill was caused by a failure in Shell's oil export hose.

"The spilled barrels impacted approximately 950 square kilometers of water surface, affected a great number of sensitive environmental resources," the NOSDRA presentation to the environment committee of the national assembly said.

"It has a direct social impact on the livelihood of people in the riverine areas whose primary occupation is fishing."

Shell said last December's spill happened while a tanker was loading oil, leading to the complete shutdown of the company's 200,000 barrel per day (bpd) Bonga facility, about 120 kilometers off the coast of the West African nation.

"We do not believe there is any basis in law for such a fine. Neither do we believe that SNEPCo (Shell Nigeria Exploration and Production Co) has committed any infraction of Nigerian law to warrant such a fine," Shell said on Tuesday.   Continued...

A logo is seen under a canopy of trees at a Shell petrol station in central London July 29, 2010. REUTERS/Toby Melville