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CORRECTED-UPDATE 2-Shell offers 30 mln stg to settle Nigeria oil spills

Sat, 21st Jun 2014 08:32

(Corrects number of claimants in paragraph 2, clarifies size ofspills in paragraph 3)

* Claimants reject compensation offer

* Trial planned for 2015

By Ron Bousso

LONDON, June 20 (Reuters) - Royal Dutch Shell isready to pay up to 30 million pounds ($51 million) incompensation for two oil spills in Nigeria in 2008, but lawyerssaid it may face a far bigger pay out after a London court ruledit could be liable for damage.

Around 15,000 residents of the Bodo community in the NigerDelta represented by law firm Leigh Day appealed in 2011 to aLondon court for more than 300 million pounds in compensation.

Claimants say that the two spills resulted in the leakage ofof 500,000 barrels of oil but Shell estimated the volume ataround 4,000 barrels.

Shell has already offered some compensation for the spills.

In a preliminary hearing ahead of a trial which will takeplace in May 2015, the London high court ruled that Shell'sNigerian subsidiary could be liable if it were proven that itdid not take reasonable steps to protect and maintain thepipeline from thefts which have plagued the key African oilproducer.

"Short of a policing or military or paramilitary defence ofthe pipeline, it is my judgement that the protectionrequirement involves a general shielding and caringobligation," the judge said in a ruling.

Leigh Day argued that under the Nigerian Oil Pipelines Actanyone who suffered from an oil spill can claim compensation ifthey can show a company was guilty of neglect in failing to"protect, maintain or repair" its pipeline.

The lawyer representing the claimants on Friday rejectedShell's offer.

"Shell have consistently sought to underestimate the damagewhilst paying only lip service to an apology. These spills,which are some of the largest oil spills in history, havedevastated a community of many thousands of people and ravagedthe environment," Martyn Day said in a statement.

"The offer of 30 million pounds has been offered before andhas been flatly refused by our clients who found it insultingand derisory, nothing has changed this view."

Shell urged the claimants to reach a settlement before theMay trial that is expected to last three months.

"From the outset, we've accepted responsibility for the twodeeply regrettable operational spills in Bodo," Mutiu Sunmonu,Managing Director of the Shell Petroleum Development Company ofNigeria Ltd (SPDC), said in a statement.

"We hope the community will now direct their UK legalrepresentatives to stop wasting even more time pursuingenormously exaggerated claims and consider sensible and faircompensation offers," Sunmonu said.

Thousands of oil spills have occurred in Nigeria since the1970s as a result of oil theft, many of which have yet to becleaned up. (Editing by Jon Boyle)

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