Shell won't challenge takeover of Nigeria oil wells

A Nigerian schoolboy walks past the logo of Dutch oil giant Shell January 17,2006. REUTERS/George Esiri

ABUJA (Reuters) - Royal Dutch Shell RDSa.L said on Tuesday it will not mount a legal challenge to the Nigerian government's plan to take over its oilfields in Ogoniland later this year.

President Umaru Yar’Adua earlier this month announced the government will give the oilfields, located in the Niger Delta, to another company after they were abandoned by Shell 15 years ago. Production at the time had averaged around 28,000 barrels per day.

“Shell will not challenge this in court,” said Precious Okolobo, a spokesman for Shell in Nigeria.

Analysts said that losing the right to operate in the Ogoni area was unlikely to have much impact on Shell’s business but that the move was important symbolically.

“If this action will bring peace to Ogoniland, we will support it,” Okolobo said.

Shell closed its operations in the area in 1993 due largely to popular protests over pollution and lack of development.

The protests were spearheaded by a rights group, the Movement for the Survival of Ogoni People (MOSOP), whose leader Ken Saro-Wiwa was executed by the then-military government in 1995.

Hundreds of placard-carring villagers staged a protest against Shell in March when MOSOP said the company was trying to force its way back to the Ogoni area.

Reporting by Randy Fabi; Editing by Nick Tattersall