Shell is to begin compensation talks with thousands of Nigerian villagers who say their livelihoods were ruined by two massive oil spills in the Niger Delta, the energy giant said on Friday.
The talks will start next week in Port Harcourt, the capital of Nigeria's southern Rivers state and the hub of Africa's largest oil industry, the Anglo-Dutch company said.
About 15,000 residents of Bodo, a cluster of fishing villages in Rivers State, are seeking millions of dollars of compensation over the 2008 spills.
"We're hopeful that an acceptable agreement can be reached with the Bodo community during next week's settlement negotiations in Nigeria," a Shell spokesman said.
Lawyers acting for the villagers say the local environment was devastated by the two spills, depriving thousands of subsistence farmers and fishermen of their livelihoods.
Experts estimate the spills to be between 500,000 and 600,000 barrels, according to London-based law firm Leigh Day, which is representing the Nigerians.
Shell admitted liability for the spills in 2011 but disputes the amount of oil spilled and the extent of the damage.
"To date nothing has been paid in compensation and no clean-up work has begun," Leigh Day said.
The Nigerians' lawyer Martyn Day described Shell's position on the clean-up as "pitiful".
He said: "We will be doing our damnedest to ensure that Shell pay out a fair amount for the damage they have caused and put the Bodo Creek back into its pre-spill state."
Shell said it hoped a deal could be reached with the villagers to provide "fair compensation, as well as a way forward on cleaning up the entire area affected by oil spills".
Previous talks have broken down over a compensation and clean-up package for the Nigerians.
Shell provided the villagers with food relief in 2009 but Leigh Day blasted the supplies as "entirely inadequate for a community of 31,000 people".
The oil giant said it rejected some of the claims made by Leigh Day, but that its goal was "resolution, not recrimination".
It described the 2008 spills as "highly regrettable".
Shell blames oil thefts and sabotage of key pipelines as the major causes of spills in the Delta, where swathes of land have been ravaged by oil pollution.
Nigerian environmentalist and activist Nnimmo Bassey welcomed the compensation talks, but added that Shell needed to clean up the spill.
"It is a good thing if Shell can compensate the villagers. More important is a cleanup of the mess: the pills, the pollution so that the fishermen and farmers can have their means of livelihood back," Bassey who heads local NGO Environmental Rights Actions told AFP.
Nigeria is the world's eighth-biggest oil producer, pumping some two million barrels a day.
Shell is the biggest producer in the west African country, where it has been drilling for over 50 years.