Yemisi Izuora
TotalEnergies is facing legal action from some non state actors which are seeking mitigation of environmental damages before exit.
Several nonprofits including Friends of the Earth France have sued oil major in a French civil court on Wednesday, seeking to obtain environmental documents related to an onshore Nigerian oil asset it is attempting to sell, according to Reuters.
Nigerian regulators have not yet approved the sale announced in January of Total’s 10 per cent stake in the asset, which was formerly known as SPDC, to local company Vaaris.
SPDC has struggled with hundreds of oil spills due to theft, sabotage and operational issues that have led to costly repairs, high profile lawsuits and the departure of operator Shell with with Eni also seeking to sell its 5 per cent stake.
The lawsuit cites France’s corporate duty of vigilance law, which requires companies to mitigate risks associated with their business, including environmental damage.
The NGOs want to analyse environmental management plans included in the sale agreement. If they deem them insufficient under Total’s duty of vigilance, they can file a second lawsuit asking the court to force Total to take remedial steps.
TotalEnergies, purchasing company Vaaris and Nigeria’s Upstream Petroleum Regulatory Commission did not respond to requests for comment.
SPDC’s pipeline and flowline network runs about 4,000 km (2,486 miles).
TotalEnergies CEO Patrick Pouyanne said at the company’s May 29 shareholder meeting that it was selling the asset, because it was unable to stop oil theft.
“There is a national sport of sorts involving making holes in these pipes to take the oil and load it onto tankers. It’s like the Wild West,” he said.
Acts of sabotage have largely subsided since Shell sold its 30% stake in the asset, which was recently renamed Renaissance, to a Nigerian company and production has increased, he added.
Total was responsible for confirmed cases of pollution under its ownership, Pouyanne told the meeting, but Vaaris would be responsible for future leaks.
“Given the increased production that has occurred with the departure of international companies, I think they’ll have the money to finance cleanup. And above all, there will be less sabotage, so pollution will go down,” he said.
Before it approves the sale, Nigeria’s oil regulator must first verify Vaaris has the technical and financial expertise to operate the asset, including maintaining environmental standards.
NGOs, however, question whether Renaissance’s new owners have that financial capacity. Vaaris has yet to close its transaction with Total despite repeated deadline extensions. And Shell had to loan funds to buyer Renaissance Africa Energy Company in order to complete the sale of its stake.
“None of the divestments so far has involved a blueprint for environmental remediation,” said Ken Henshaw, executive director of We the People, an NGO based in the Niger Delta involved in the suit.
“The Nigerian government is more interested in how the successor companies will expand the assets and generate more oil for revenues rather than managing environmental issues,” he said.
Together Total, Eni and Renaissance Africa Energy own 45 per cent of the Renaissance asset, with state-owned Nigerian National Petroleum Company holding the remaining 55 per cent stake.