Shell contests huge Nigeria fine

Oil giant Shell says it has appealed against a Nigerian court ruling that it pay $1.5bn to residents of the country's oil-producing region.
The high court had given Shell until 1200 local time (1100 GMT) on Monday to pay the fine but Shell says it will not comply until the appeal is heard.

The ruling against a Shell subsidiary was to compensate the Ijaw community for environmental damage in the region.

Meanwhile, Ijaw militants say they will step up attacks on oil installations.

Oil concession

The groups want more of Nigeria's oil wealth to benefit local communities.

Four groups - the Niger Delta People's Volunteer Force, the Coalition for Militant Action in the Niger Delta, the Martyrs Brigade, and the Movement for the Emancipation of the Niger Delta - said they were forming a coalition to step up their opposition to the government.


Nigeria's oil output has been cut by about 25% after a series of attacks on oil installations and kidnappings of foreign oil workers.

During a visit to the region on Saturday, President Olusegun Obasanjo warned that the government would no longer tolerate militia attacks.

On Friday, the government announced that it had awarded an oil exploration concession to a local company with links to militant groups.

The fine was first ordered in February. On Friday, the court rejected a request to postpone the payment.

A Shell spokesman said he was disappointed by Friday's judgement, but would not comment further until the Appeal Court had heard the case.

The Ijaw have been campaigning since 2000 for compensation for environmental degradation in the oil-rich Niger Delta region.

They took the case to court after Shell - the biggest oil producer in Nigeria - refused to make the payment ordered by Nigeria's parliament.

Warning

Lawyers for the Shell Petroleum Development Company had argued in the federal court in Port Harcourt that the joint committee of the National Assembly that made the order in 2000 did not have the power to compel the oil company to make the payment.

In February, Ijaw community leader Ngo Nac-Eteli said that if Shell wanted to buy time by taking the case to the appeal court, the company would not be allowed to operate on Ijaw land until the case was settled.

He did not elaborate on how the community would stop Shell's operations.

The BBC's Abdullahi Kaura Abubakar in Port Harcourt says the case has the support both of community elders and the militant groups that have been attacking oil installations in the Delta region.

But our correspondent warns that even if the money is paid, the region would not necessarily be pacified unless the various groups were happy with how it was distributed.