Royal Dutch Shell is ready to pay up to N8.3 billion as compensation for two oil spills

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Royal Dutch Shell is ready to pay up to $51 million (N8.3 billion) as compensation for two oil spills in Nigeria in 2008, after a London court rejected a larger claim on Friday.

About 11,000 residents of Bodo, a community in Rivers State, represented by law firm, Leigh Day, had appealed in 2011 to a London court for more than $510 million (83.15 billion) in compensation for the spilling of 500,000 barrels of oil.

The London High Court on Friday rejected the claimants’ attempts to expand the scope of the compensation, ruling that the pipeline operator could not be held responsible for damage caused by oil theft.

However, Shell’s offer from September 2013 to settle the case for $51 million remained on the table, as Shell urged the claimants to reach a settlement before trial begins in May 2015 in Nigeria.

“From the outset, we’ve accepted responsibility for the two deeply-regrettable operational spills in Bodo,” Mutiu Sunmonu, managing director of the Shell Petroleum Development Company in Nigeria Ltd (SPDC), said in a statement.

“We hope the community will now direct their UK legal representatives to stop wasting even more time pursuing enormously exaggerated claims and consider sensible and fair compensation offers.”

Massive oil theft, sabotage of infrastructure and leaks from ageing pipelines are cutting into the profits of oil majors operating in Nigeria, and as well damaging the public finances of the African economy.

Shell and Bodo were previously involved in settlement talks, but they broke down in September 2013 after Shell’s offer of £30m (worth about N7.5bn then) was rejected in Port Harcourt.