* Shell rejects "unsubstantiated assertions"
* Spill size, cause have financial, reputational impact
* Oil theft a major cause of spills in Niger Delta
* Some oil majors selling assets onshore Nigeria
By Joe Brock
ABUJA, Nov 7 (Reuters) - Amnesty International called intoquestion Royal Dutch Shell's accounting in Nigeria foroil spill amounts and causes, saying the oil major was seekingto avoid compensation payments and damage to its reputation.
The Anglo-Dutch oil major responded in a statement that it"firmly rejects unsubstantiated assertions that they haveexaggerated the impact of crude oil theft and sabotage todistract attention from operational performance".
There are hundreds of leaks every year from pipelines thatpass through the creeks and swamplands of the Niger Delta,damaging the environment and cutting into profits of oilcompanies including Shell and Italy's Eni.
Widespread oil theft, sabotage and pipeline operationalfailures are cited as the main reasons for leaks, but theofficial cause of a leak is often disputed between oil companiesand local communities.
Shell says most of its oil spills are caused by sabotage andtheft and that it cleans up the damage whatever the cause.Amnesty International said in a report on Thursday that evidencesuggested this might not be true.
"Shell is being disingenuous about the devastation caused byits Niger Delta operations. This new evidence shows that Shell'sclaims about the oil spills cannot be trusted," said AudreyGaughran, Amnesty's director of global issues.
The watchdog said it saw reports of spills that stated thereason as sabotage without any further explanation and alsoexamples in which Shell had calculated the size of a spillbehind closed doors.
Amnesty also said it worked with U.S. pipeline specialistAccufacts, which found that some pictures on Shell's websiteshowed that spills categorised as being caused by sabotage, weremore likely due to corrosion of ageing pipelines.
Accufacts also questioned the methodology used by Shell incalculating the cause and size of spills.
Shells said that since 2011 it has published spillinvestigations including photographs on its website, the onlyoil major operating in Nigeria to do so.
"We seek to bring greater transparency and independentoversight to the issue of oil spills, and will continue to findways to enhance this," the statement said.
TRANSPARENCY HAS IMPROVED
Amnesty acknowledged that Shell had improved itstransparency over oil spills since 2011 and that the Nigeriangovernment needed to improve the capacity of its regulators.
The decision over the cause of an oil spill can have seriousfinancial and reputational consequences for oil firms.
Shell is locked in a legal dispute with thousands ofvillagers in Nigeria's Bodo community over damage caused by twospills in 2008, for which the company has taken responsibility.
The two sides dispute the size of the oil spill and thedamage caused. The community rejected a compensation offer of7.5 billion naira ($47 million) in September.
Shell and U.S. oil firms Chevron and ConocoPhillips are selling assets in the Niger Delta, partly due to thedamage caused by oil theft and spills.
When an oil spill occurs in Nigeria, there is a JointInspection Visit (JIV) to determine the size and cause, whichincludes representatives from the oil company and the NationalOil Spill Detection and Response Agency (NOSDRA).
Amnesty's report said, based on interviews, that in manycases NOSDRA has little involvement in determining the cause andsize in the JIV because of a lack of capacity and funding,leaving Shell to be "judge and jury".
"This is a system that is wide open to abuse - and abusehappens. There is no one to challenge the oil companies andalmost no way to independently verify what they say. In effectit's, 'Trust us - we're big oil,'" Gaughran said.
The Niger Delta has for years been plagued by a range ofproblems including environmental degradation, kidnappings, oiltheft, armed rebellions, and conflict between communities overclean-up contracts or compensation deals.
