Remediation Cost Evasion: How Exxon will Fuel Climate Change Crisis in Nigeria

Exxon wants to quit the Nigerian oil business, but it doesn't want to pay remediation costs on past activities. What impact will this have on the climate change crisis in the Niger Delta in Nigeria?

Oil Spill, Credit: Aljazeera.com

Exxon Mobil faces massive remediation costs as a result of its failure to properly decommission and cap oil and gas assets throughout the Niger Delta, particularly those sold to Nigerians in recent divestment programs.

According to stakeholders, the recent case of Aiteo’s Nembe wellhead blowout highlights the need to enforce relevant laws and ensure that multinationals that sold assets to Nigerian companies pay remediation charges.

On the issue of remediation, Aiteo recently claimed in a lawsuit that it paid $799 million to Shell for the acquisition of the NCTL pipelines and assets and that the company lost $389.6 million as a result of leakages in the pipelines and the asset’s degraded condition.

NCTL pipelines, Credit:Business Post

Aiteo also claimed that $933 million had been spent on pipeline repairs and the acquisition of equipment, such as well-heads, generators, and pumps, as well as the replacement of flow lines within the NCTL, which it purchased from Shell.

Right now, the environmental condition of the affected locality remains desperate, while Shell and Aiteo wrangle at the courts. Experts speculate that the same thing could occur with Exxon’s sale of its assets, preparatory to scaling down its oil production capacity in Nigeria.

The oil company has been taking a battering from a record oil price crash as stay-at-home directives around the world triggered the steepest fall in oil use in history, and crude producers in Saudi Arabia and Russia saturated the world with a glut in an output dispute for months. Consequently, Exxon Mobil recorded its first yearly loss since 1999, after losing $22.4 billion in 2020, making it reluctant to pay remediation charges on sold assets.

Still, ExxonMobil continues inviting bids for disposal of its assets and surplus materials, according to information on its website, a decision that has made Lagos-based Seplat one of its latest suitors.  According to Premium Times, Seplat is in talks to buy Exxon Mobil’s Nigerian shallow water assets.

An indigenous company, Chappal Petroleum Development Company, is another strong contender for the Exxon Mobil Nigeria oil and gas assets, according to Vanguard newspapers.

 The assets comprise 40 percent of interests in the Qua Iboe fields of four blocks and pipelines in oil mining leases (OMLs) 67, 68, 70 and 104 located in shallow water.

Qua Iboe Field, Credit: Business Day

These events come as a result of the downturn in the oil market, but Exxon is proving reluctant to pay remediation charges, which could increase the climate change crisis of the people, as the environment will remain polluted.

In addition to non-payment of remediation charges, Exxon shows reluctance to tackle environmental damages resulting from past oil spills, making affected communities susceptible to the nasty consequence of climate change. 

Ms. Ijeoma Nwogwugwu, an oil industry enthusiast who has extensively covered the sector, wrote in a recent article about how this is done. “Oil multinationals that want to avoid spending several millions of dollars on decommissioning have taken advantage of the loopholes by selling their oil assets, including aging and rusting infrastructure, to local oil firms.”

Michael Wattsa and Anna Zalik, writing in an article titled Consistently unreliable: Oil spill data and transparency discourse, gave reasons why Exxon is able to get away with this. “Our recent research reveals enormous discrepancies in oil spill data disclosed by regulatory institutions and corporate sources in Nigeria. Federal agencies as well as major international oil corporations publish inconsistent and sometimes contradictory figures, often employing different spatial or regional categorizations,” Watt and Zalik wrote.

To illustrate the company's reluctance to clean up after oil spills, nearly 10 years after it was urged for areas polluted by Exxon and other oil companies in the Niger Delta, work has begun on only 11% of planned sites while vast areas remain heavily contaminated, according to a new investigation by four NGOs. In 2011 the UN Environment Programme (UNEP) released a report documenting the devastating impact of the oil industry in Ogoniland, and set out urgent recommendations for clean-up. But the new investigation highlights that “emergency measures” proposed by UNEP have not been properly implemented and that the billion-dollar clean-up project launched by the Nigerian government in 2016 has been ineffective.

To show how true this is, a non-governmental organisation, Akwa Ibom Oil Producing Community Network (AKIPCON), has accused Akwa Ibom State branch of the National Oil Spill Detection and Response Agency (NOSDRA) of conniving with Exxon Mobil to block crude oil spill recovery, clean up, remediation and damage assessment in the state, according to Blueprint online newspapers.

“We write to notify the executive secretary of the ongoing connivance by National Oil Spill Detection & Response Agency (NOSDRA), Akwa Ibom State Zonal Office with Mobil Producing Nigeria Unlimited (Exxon Mobil) which hinders the execution of its official mandate of crude oil spill recovery, clean up, remediation and damage assessment as contained in the attached NOSDRA Regulations 25 & 26 of 2011,” said the letter.

It is no wonder that Osai Ojigho, Amnesty International Nigeria, wrote on his organization’s website about the situation.

“The discovery of oil in Ogoniland has brought huge suffering for its people. Over many years we have documented how Shell has failed to clean up contamination from spills and it’s a scandal that this has not yet happened. The pollution is leading to serious human rights impacts – on people’s health and ability to access food and clean water. Shell must not get away with this – we will continue to fight until every last trace of oil is removed from Ogoniland.” Replace Exxon with Shell, and the same situation persists.

Unfortunately, activities of this nature in the past triggered off the climate change crisis of the people. On 12 January 1998, according to Wikipedia, a 24-inch pipeline on Mobil's Idoho platform burst, spilling 40,000 barrels of Qua Iboe light crude oil into the Niger River Delta. The oil covered sections of Nigeria and the Republic of Benin's coastline, and drifted westwards, extending as far as 900 km away in Lagos Harbor. In total, 500 barrels (21,000 gallons) of oil washed ashore. Affected shoreline areas suffered medium to heavy impact, but were limited to only a small number of locations around the coast, including two mangrove environments.

According to a community leader, Okpor Ezeukwu, in the Guardian,  his community used to look like Yankari Games Reserve, Nigeria’s most prominent game reserve,  with a very rich wild life, among which were elephants, buffalo, monkeys, bush pigs, giant tortoise, deer, porcupine, leopard, antelopes and grass cutters.

Environmental degradation in Niger Delta

“The animals must have gone extinct or fled to more friendly environments. Hunters have disappeared from our communities, as they no longer catch games even after hunting the whole night,” he said.

Studies indicate that, pound for pound, mangroves can sequester four-times more carbon than rain forests can. More than 60% of the fish in the Gulf of Guinea use the roots as a breeding ground. They protect against storms and coastal erosion, and could increase resilience to more unpredictable weather in tropical areas and rising sea levels. Exxon’s oil exploration activities led to the destruction of mangrove forests, one of the factors  that triggered off the climate change crisis in the Niger Delta.

In an editorial in 2021, The Guardian said that  oil spills among many others are one of many others in the region for which the response of various governments are largely lackluster. These have brought up grave manifestations of climate change crisis which this menace has triggered.

On the issue, a researcher, Edu Abade, wrote in The Guardian of 2021 that  some manifestations of the climate change crisis triggered by gas flaring and oil spills include the disappearance of wildlife, fishes in rivers, creeks and fresh waters of the Delta, excessive heat, shrinking vegetation, especially of economic trees like palm trees, oranges, mangoes, pears, plantain and banana.

According to Alexander Sewell in his 2019 article on Wathi, perpetual environmental abuses form chains that strengthen if they are not addressed, especially in large parts of West Africa, which  have suffered decades of ecological damage and are now suffering the second and third order effects in the chains of climate change.

To checkmate having to suffer climate-change effects over Exxon’s operations, groups have been fighting.

According to the Vanguard, the Ijaw Youths Council has begun protest against Exxon Mobil, over what they described as constant serial pollution of coastal communities, from crude oil and gas exploitation activities of the company in Akwa Ibom State.

The group, which vowed to crippled both onshore and offshore operations of Exxon Mobil, said the company could carry out their operations while communities in Eastern Obolo and Ibeno LGAs were massively soiled with oil pollution from the company.

Chairman of IYC Joint Council in Akwa Ibom State, Mr Isaac Ebrewong Ikpe and Secretary, Michael Jaja, said Exxon Mobil treats with kid gloves the oil spill which occurred since on 26th October 2021 in Ibeno, despite series of letters sent by the group to the company’s management.

This contradicts Exxon’s claim that it is committed to providing affordable energy to support human progress while advancing effective solutions to address climate change.

“Our climate change risk management strategy consists of four components: Reducing emissions in its operations through avoidance and improving energy efficiencies, providing products to help customers reduce their emissions, developing and deploying scalable technologies to help decarbonize highest-emitting sectors, proactively engaging on climate-related policy,” it said on its website.  

The way forwards for Exxon remains clear, even though there are stark contrasts between responses to spills from oil tankers and blowouts in the global north to those in the Middle East and Africa. These contrasts reflect inequalities in affected communities, and often follow corruption, security breakdown or war, wrote   David I.Little, Stephen R.J. Sheppard, and David Hulme in their 2021 paper published in Ocean and Coastal Management.

“Spill contingency planning and OSR are necessary but not sufficient everywhere. OSR should continue using NEBA to mitigate and manage spills, adaptive management to restore habitats, and adherence to health, safety and waste minimization standards for as long as hydrocarbons are in use,” they wrote.

The cessation of operations at an oil and gas platform and the return of the seafloor to its pre-production state for installations and any relevant structures that have reached the end of their productive life is referred to as decommissioning.

Onshore decommissioning entails capping oil wells, cleaning up and removing all production and pipeline risers supported by the platform, and removing the platform and dumping it in a junk storage area or manufacturing yard.

Many experts believe that the blowout in Nembe recently could have been avoided if the wellhead had been properly and permanently plugged and decommissioned.

Nigeria’s transitory regulatory environment, as well as the authorities’ inability to strengthen environmental and petroleum laws for the deactivation of abandoned wells and aging oil facilities are thought to have exacerbated matters.

Exxon should urgently comply with the court judgments, such as the one that ordered it to pay N81.9 billion as compensation for oil spills from the company's facilities which occurred between 2000 and 2010 fishing and farming communities in Akwa Ibom State.

"By this judgment, the people will  no longer resort to self-help and many communities will approach the courts with thousands of oil spills and pollution cases pending,” said Godwin Ojo,  Executive Director of Environmental Rights Action (ERA), while speaking on the judgment.

According to the Guardian, policy makers in Nigeria would need to take a different look at problems posed by multinationals like Exxon and ensure that the people in the Niger Delta do not roast to death while in the same vein, the country’s economy is sustained from the proceeds of the oil production activities in their region.

 Policy pronouncements by government itself have seemingly taken the people of the oil producing communities for granted. The Petroleum Industry Act (PIA) recently signed into law by Mr. President which lays down rules for the protection of the environment and the interest of the host communities as well as environmental cleanups when necessary should help to allay the fears of the people in the Niger Delta region.

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