August 2005 was another rough time for oil major Shell Oil's Nigeria operation. Frustrated over lack of adequate compensation by the company for a devastating oil spill in December 2003, host communities shut down two of Shell's pumping stations that produce around 40,000 barrels of oil daily.
While Shell admitted culpability, negotiations broke down on August 16, 2005, after villagers rejected its offer of us $900 compensation for two worst-hit communities. Protesters halted production at the two facilities but called off the demonstration by August 22, 2005. Reports said Shell had notified them that no negotiations would take place while production remained halted. But the oil sector's problems continued. Workers voted to shutdown Nigeria's entire petroleum refining industry against the government's move to privatise refineries "without due process".
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