"From a strategic planning perspective, this is the wrong site; from the perspective of Government policy which seeks to foster balanced regional development, this is the wrong site; from the perspective of minimising environmental impact, this is the wrong site; and consequently, from the perspective of sustainable development, this is the wrong site"
* Shell says oil contained, locals say it has spread
* Oil spills common in Africa's top energy producer
By Tife Owolabi
EWELESUO, Nigeria, Aug 17 (Reuters) - Shell said on Friday it had contained oil leaked from a failed pump within a flowstation on Nigeria's Nembe Creek though local residents disputed this, saying it had spread to mangrove swamps.
"There was no oil spill, and there was no impact on the environment," said Precious Okolobo, spokesman for Shell Petroleum Development Corporation (SPDC), a joint venture majority owned by the state oil firm.
"The pump was immediately shut down. However, some oil escaped from the seal into the saver pit in the flowstation, with some sheen observed," he said.
A Reuters reporter on the scene saw spilled oil, some of it lapping against the roots of mangroves, but Nigerian Naval officers barred access to an area behind the flowstation where locals reported a large oil slick.
"We observed a crude oil slick and sheen along the creek and, it continued into the Brass River," said Alabo Nengi James, an official in the Ewelesuo community of the Nembe Kingdom.
"Shell has not done any containment; no such signs at all."
Oil spills from equipment failures or loading accidents are common in the swampy Niger Delta region of Africa's top energy producer.
The Anglo-Dutch oil major says locals sometimes exaggerate the impact in the hope of boosting their compensation claims.
Armed gangs also tamper with pipelines to steal crude and Shell's Nembe Creek trunk line has been subject to numerous spills in recent years, many due to sabotage.
A landmark U.N. report in August last year slammed the government and multinational oil companies, particularly Shell, for 50 years of oil pollution that has devastated the Ogoniland region of the Niger Delta.
The government and oil firms have pledged to clean up the region and other parts of the Delta, but residents say they have seen very little action.
ExxonMobil's Nigeria unit said on Wednesday it was investigating an oil spill near its facility off the country's southeast coast, but has yet to give an assessment of it.