How Shell turned a leaking pipeline into profit

In early June 2026, the BBC revealed(opens in new window) that “Shell continued operating a major oil pipeline in Nigeria for years even though it knew it was causing widespread pollution – despite a warning from its own staff.”

The pipeline in question is the Nembe Creek Trunk Line (NCTL). Commissioned by Shell in 2010, it was, until recently, one of the main routes used to transport crude oil to Shell’s export terminal on the coast. Despite being new, Shell admitted it was struggling to address pollution from the NCTL as early as 2012(opens in new window) .

In 2013, Shell carried out a strategic review(opens in new window) of its operations in Nigeria, and appears to have found a “solution” to its leaky pipeline problem – making it somebody else’s problem. Shell decided to sell the NCTL. In 2014, Aiteo Eastern Exploration and Production ₁ , a newly registered company, bought it(opens in new window) .

But Shell’s challenge was not just with the pipeline itself. The NCTL was the means by which the company evacuated oil from several major fields to the Bonny Island export terminal. Shell would still face a serious dilemma if it continued to use the NCTL to transport crude, given that it must have known that Aiteo Eastern could hardly do what Shell itself, a company with over 60 years of commercial production in Nigeria, could not, and gain control of the tampering, leaks, and associated pollution that had plagued the pipeline.

Three major Shell oil leases (known as oil mining leases or OMLs) used the NCTL. So Shell sold its stake in those leases – OMLs 18, 24, and 29 – as well. The oil leases and the NCTL were put up for sale together(opens in new window) in 2013(opens in new window) .

Shell has said that it divested from the Niger Delta responsibly ₂ . The company claims(opens in new window) that before divesting, “we take care to assess the counterparty’s financial strength; operating capabilities [and] policies governing [health and safety]”. Several features of the NCTL asset sales call this claim into question.

The three OMLs and the NCTL were sold to three newly created companies, each registered ₃ in 2013. They were all sold as working assets, meaning Shell sold them knowing the new buyers would continue to pump oil through the NCTL.

The companies that bought the assets were not only newly established, but their financial stability, particularly in dealing with major challenges, was open to question.

Sale of the Nembe Creek Trunk Line and OML 29

Aiteo Eastern paid Shell USD 1.7 billion(opens in new window) for the NCTL and OML 29 (which used the pipeline). The company borrowed heavily to finance the purchase, and one of the lenders was Shell itself. According to court documents, Aiteo borrowed USD 2 billion(opens in new window) from a consortium of lenders. Shell put up one quarter(opens in new window) of the total. 

Aiteo faced difficulties repaying the loan, in part due to the problems it had with the NCTL. By 2019, the company had reportedly defaulted, and it subsequently became locked in legal battles(opens in new window) with Shell and other lenders. Aiteo’s debt had ballooned to USD 2.6 billion(opens in new window) by 2023. It is unclear if the legal actions or debt issues have been resolved.

The condition of the NCTL was known at the time of sale. The journal Africa Oil and Gas(opens in new window) , in an article dated 7 February 2014, shortly before the deadline for bids on the assets, stated that the NCTL was so problematic that some of the entities planning to bid were already working on alternative crude transport mechanisms. Yet Shell sold this as a working asset, and Aiteo bought it and went on to use it. The problems, unsurprisingly, persisted(opens in new window) .  

There is more.  A landmark 2023 report(opens in new window) on oil pollution by the Bayelsa State Oil and Environmental Commission ₄ has claimed that a 2014 Nigerian Department of Petroleum Resources document, based on 2013 data, already showed Aiteo as the owner of assets. Yet the bid process was not closed until early 2014. The decision to sell was only announced in October 2014(opens in new window) , and the deal was not completed until March 2015(opens in new window) .

Shell told Shell ₅ SOMO that the divestment “was subject to approval by the Federal Government of Nigeria. The Government conducted its own due diligence and probed various aspects of both the buyers and the transactions. Approvals were granted in accordance with applicable regulations upon completion of extensive review.”

According to the Bayelsa State Commission, the contract negotiations took place with the Ministry of Petroleum Resources. At the time of the NCTL sale, the Minister of Petroleum Resources, and ultimately responsible for the industry, was Mrs Diezani Alison-Madueke. Before becoming Nigeria’s Minister of Petroleum Resources, Alison-Madueke was a senior employee of Shell Nigeria(opens in new window) for more than a decade.

In 2017, she was named in a US Department of Justice action under the Kleptocracy Asset Recovery Initiative, in connection with allegations that businessmen involved in the oil industry had conspired to bribe her(opens in new window) . The case concluded in 2023 with a Justice Department announcement(opens in new window) that it had recovered “over $53 million in profits obtained from corruption in the Nigerian oil industry” linked to the businessmen.

The same year (2023), Alison-Madueke was charged(opens in new window) in the UK with receiving bribes related to oil deals during her time in office (from 2010(opens in new window) to 2015). On 17 June 2026, a London court cleared her on all counts(opens in new window) . During her trial, several Nigerian oil moguls were named as allegedly providing bribes. They included Benedict Peters and Igho Sanomi(opens in new window) . According to Nigeria’s Beneficial Ownership(opens in new window) database, Peters is a beneficial owner of Aiteo Eastern E&P, as is the Nigerian company Taleveras, which was founded by Sanomi. Both men have denied(opens in new window) any wrongdoing(opens in new window) , and Alison-Madueke has criticised the UK’s National Crime Agency(opens in new window) and its handling of her case. 

Eating your cake and having it (or ‘turning your problems into profit’)

While Shell offloaded the NCTL, the company still managed to profit from the oil that ran through it. 

Shell sold its stake in OML 18 to a company called Eroton for USD 737 million(opens in new window) . Eroton, which, like Aiteo Eastern, was registered in 2013, financed the purchase with substantial borrowing, including a loan(opens in new window) from Shell. The loan came via Shell Western Supply and Trading, an oil trading subsidiary of the multinational. Eroton made a deal ₆ with this Shell trader to be the offtaker (buyer) of its oil, which means that Eroton sold its OML 18 oil to Shell, the company which sold OML 18 to Eroton.

Shell presumably profited from trading the OML 18 oil, and also benefited from interest on its loan to Eroton. Eroton’s fortunes have been less rosy.

Eroton is a Special Purpose Vehicle – a company created to enable investors to manage an asset and/or isolate financial risk. The company is owned by multiple other companies, involving, over time, investors from Nigeria, Mauritius, the UK, Ireland, and the Netherlands, and the deals and financial arrangements behind Eroton are eye-wateringly complex ₇ . The amalgam of financial interests behind Eroton has faced internal strife and debt problems. The journal African Intelligence(opens in new window) has described it as “a saga involving debts, share transfers and broken promises surrounding the valuable OML 18 oil block”.

The situation came to a head in 2023 when Eroton was removed as operator of OML 18(opens in new window) (although the company still owns a stake in the oil lease). It was replaced by a subsidiary of the Nigerian National Petroleum Company (NNPC). One of the main reasons cited(opens in new window) for its removal was that, at one point, oil production fell to zero under its operatorship, largely because the NCTL was so problematic. The company’s financial situation was reported to be acute. According to NNPC, Nigeria’s Federal Inland Revenue Service(opens in new window) sealed Eroton’s head office in Lagos for more than 12 months due to non-payment of outstanding taxes to the government.

Things appear to have got worse. In February 2026, a UK court granted a receivership order(opens in new window) relating to debts owed by Eroton to another Nigerian company. The UK court case was based on Shell being the offtaker(opens in new window) for Eroton’s OML 18 oil, which would mean Shell has been buying and trading oil from an OML it sold for over a decade ago. The court specifically stated that it was “satisfied that there is an asset over which receivers can be appointed, namely the sums due and which will become due from Shell”.

Eroton’s future is not clear. Indeed, it is unclear whether the company has a future at all, as it has also been embroiled in insolvency proceedings(opens in new window) in Nigeria.

Shell’s continuing responsibility?

Shell has told SOMO that it conducted careful due diligence on all asset sales in Nigeria. Yet, far from a carefully executed process, the picture that emerges, particularly in light of the BBC’s recent revelations(opens in new window) about the NCTL, is that Shell faced a massive problem and found a profitable solution. The BBC exposed how Shell continued to pump oil through a pipeline that was causing environmental devastation. SOMO’s research exposes how the company sold the pipeline, knowing oil would continue to be pumped and while continuing to profit at arm’s length.

SOMO asked Shell, Eroton, and Aiteo (Nembe) for comment on the sale of the NCTL, and OMLs 18 to Eroton and 29 to Aiteo, respectively. Only Shell responded. In this article, SOMO also refers to prior communication with Aiteo Eastern (now Nembe E&P) in February 2026 regarding another matter. 

A Shell spokesperson provided comments, which are included earlier in the article. The spokesperson went on to say:

“Thank you for the opportunity to comment on your article. Shell disclosed all relevant information regarding its divestments to the relevant authorities at the time the transactions were entered into and completed more than a decade ago. 

“The two divestments you have chosen to highlight formed part of a broader programme initiated in 2008, under which Shell, TotalEnergies and ENI divested, to a range of parties, more than 15 assets held jointly with the Nigerian National Petroleum Corporation (NNPC).”