A local government in the Niger Delta is disputing the conclusion of an investigation over who was to blame for a five-week oil spill, with potentially significant implications for affected communities’ prospects of securing compensation.
Lagos-based Aiteo Eastern E&P Co. and Nigerian federal agencies concluded in a joint investigation that the rupture of an oil well in early November, which spilled thousands of barrels of crude into surrounding waterways, was caused by sabotage.
The government of Bayelsa state, which was also part of the probe, says the company is at fault.
Under Nigeria law, overturning the investigation’s findings would be the only way that communities affected by the spill can pursue financial damages. If the owners of the infrastructure are found to be responsible they are liable to pay compensation, but not if the spill is attributed to third-party interference through vandalism or theft.
“From what we have seen so far, what transpired was an equipment failure,” Bayelsa’s attorney general, Biriyai Dambo, said in an interview. “There was gross negligence on the part of Aiteo.”
The National Oil Spill Detection and Response Agency, or NOSDRA, disagrees. “As far as we are concerned, the joint investigation has been done and concluded that it is sabotage,” the organization’s director general, Idris Musa, said by phone on Monday.
A spokesmen for Aiteo and the Nigerian Upstream Petroleum Regulatory Commission, or NUPRC, didn’t respond to questions from Bloomberg.
Decades of Pollution
Nigeria has suffered for decades from environmental damage caused by oil spills in the Delta region. Communities there have launched many legal battles both domestically and internationally to get compensation from operators. Local companies such as Aiteo have become more prevalent in the area as the global majors have sold their assets.
The Aiteo well, which wasn’t producing at the time, began spewing crude into the surrounding waterways and venting fumes into the air on Nov. 1, according to Nigerian advocacy group Environmental Rights Action, or ERA. Aiteo reported a spill “of an extremely high order” to the authorities four days later, according to a company statement. It sealed the well on Dec. 8.
The head of ERA’s Bayelsa office, Alagoa Morris, visited the site on Dec. 9, witnessing river banks slicked with crude and strewn with dead crabs, a source of food and livelihoods for the local fishing settlements, he said by phone on Monday. The tides have spread oil toward the Atlantic Ocean and throughout nearby mangrove swamps, he said.
While NOSDRA doesn’t have an estimate for the total volume of oil and gas emitted before the well was contained, Aiteo has recovered about 16,000 barrels of emulsified crude, Musa said.
Representatives from Aiteo, the Bayelsa government and the two federal bodies — those responsible for reacting to oil spills and overseeing the production of hydrocarbons — visited the site twice, most recently on Dec. 22, Dambo said. The parties came to different opinions about what led to the blowout, he said.
While the company and central government pointed to sabotage, Bayelsa state has refused to accept that conclusion, said Dambo, who headed his administration’s team. “We never signed the document. We are not party to it. That investigation is inconclusive,” he said.
Bayelsa’s government alleges that Aiteo “tampered with evidence” by replacing faulty safety valves on the well before inviting the authorities to inspect the site, said Dambo. “We shall proceed to court to ensure that environmental justice is done to both the state government and the host communities,” he said.
Aiteo, NOSDRA and NUPRC didn’t respond to these allegations.
Aiteo acquired the permit for the area where the spill occurred from a consortium of oil majors headed by Royal Dutch Shell Plc in 2015. The sale price of $2.4 billion for the field and a pipeline is the largest paid so far by Nigerian companies acquiring assets from their international counterparts. It operates the license in a joint venture with the state-owned Nigerian National Petroleum Co.
©2022 Bloomberg L.P.