LONDON -- Around 11,000 Nigerian villagers who say their livelihoods were ruined in oil spills launched a legal battle Friday to seek compensation from Shell.

The case marks the first time any oil firm has faced claims in the U.K. from a community in the developing world for environmental damage caused by oil extraction operations, the villagers' lawyers said.

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Shell, the largest international firm operating in Nigeria, admitted liability for two oil spills in August 2011. However, the two sides dispute the amount of oil spilled and the extent of the damage caused, one of the villagers' London-based lawyers told msnbc.com.

At the crux of the disagreement is whether the spills that devastated the area were due to so-called operational failures on the part of Shell, or if they were the result of sabotage, illegal refining and theft.

Farmers, fishermen
Shell Petroleum Development Company (Nigeria) has admitted responsibility for two spills amounting to around 4,000 barrels. 

However, experts representing people in the Bodo community, a network of 35 villages whose inhabitants were mainly subsistence fishermen and farmers, maintain that amount is closer to 600,000 barrels, one of the villagers' lawyers told msnbc.com.

100 miles of oil: Spill likely Nigeria's worst in decade

"We have urged them to have their expert work with our expert," said Martyn Day of law firm Leigh Day & Co. "But (Shell has) totally refused."

Day said that negotiations broke down last week.

'No need for the legal activity'
Shell spokesman Jonathan French told msnbc.com that the firm cannot discuss details of the legal process, but said the company was dismayed that the case was going to court.

"There really has been no need for the legal activity which has delayed the the payout and cleanup," he said. "We accepted responsibility at the earliest point we could ... there was no need for this firm of London solicitors to take action."

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"Nobody is saying is that there isn’t a problem with oil spills in the Niger Delta," French added. "The point is that there is this formula enshrined in Nigerian law that spells out level of compensation."

Instead of resorting to court, the villagers should have followed the process already in place in Nigeria, French said, adding that the involvement of law firms such as Leigh Day "can serve to delay compensation."

$1 billion cleanup tab in Nigeria oil mess, UN says

Shell paid out $4 million in compensation to victims of operational oil spills in 2009, and $1.7 million in 2010, French said.

Shell has been criticized for its behavior in Nigeria before.

In Aug. 2011, the United Nations released a report saying the company and the Nigerian government had contributed to 50 years of pollution in the Niger Delta that could need the world's largest ever oil cleanup. The work would take up to 30 years and require an initial tab estimated at $1 billion, the report said.

On February 17, Amnesty International issued a report saying that:

"Shell's failures persist despite significant evidence based calls on the company to make meaningful changes in the way it operates in the Niger Delta. In 2011 the evidence confronting Shell was confirmed in a ground-breaking study by the United Nations Environment Programme (UNEP) that looked at the impact of oil pollution in the Ogoniland region of the Niger Delta. The UNEP report confirmed that serious environmental damage had occurred in Ogoniland, one area of the Niger Delta, over many years. It found systemic failures in Shell’s approach to cleaning up pollution and rehabilitating land, which have exposed tens of thousands of people to a sustained assault on their economic, social and cultural rights."

 

Nigerian villagers say oil washing up on the coast comes from a Royal Dutch Shell loading accident last month that caused the biggest spill in Africa's top producer in more than 13 years.

Shell denies that any of the oil is from its 200,000 barrel per day Bonga facility, 120 km offshore and accounting for 10 percent of monthly oil flows, which was shut down by the spill on Dec. 20.

Shell says five ships were used to disperse and contain the spill and that this kept any oil from washing ashore.

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But local villagers, as well as environmental and rights groups, dispute this account, saying the oil is still at large, coating parts of the coast, killing fish and sparking protests.

On Saturday, a Reuters team visited two of 13 villages whose residents say they were affected by the spill in the steamy swamps of the Niger Delta. In both, there were stretches of beach coated in a film of black sludge with a rainbow tint.

In one, two children skipped along the beach, dodging the puddles of sticky ooze.

Villagers in Orobiri, Delta state, spent much of the day scooping crude from the water in plastic buckets and jerrycans.

"When this spill occurred, we called on Shell to come and do a clean up, ... but since then, they have not turned up, so we the communities now did a clean-up instead," said Jacob Ajuju, the paramount chief of Orobiri village, surrounded by rows of assorted buckets and containers full of crude.

As he spoke, dozens of women villagers marched in protest at the spill, their heads adorned with leafy branches to symbolise unhappiness. Others continued to tip the oil from jerrycans into large plastic drums.

"On Christmas day, all the women you see here, were just at the seaside parking this oil into the jerrycans," said Dennis Igolobuabe, Orobiri community youth president.

Shell says no oil from the spill washed up on the coast.

"We believe the oil on the beach is not from Bonga. We made significant progress every day to disperse the oil that leaked from Bonga," Shell Nigeria spokesman Precious Okolobo told Reuters in an emailed statement.

"We are confident that any oil of that age, colour and consistency that hits the beach is not ours. We are taking samples ... which will be reviewed to provide evidence that this is not Bonga oil on the beach," he added.

Okolobo suggested the oil may have been from "a third party spill which appeared to be from a vessel, in the middle of an area that we had previously cleaned up".

Spills by all oil companies operating in the region are common, and it is sometimes hard to tell whose is whose.

On another beach near Agga village, a man on a motorbike paused to look at scores of silvery fish washed up dead.

"Before this spill came, we were already been informed by Shell in Warri (the main town in the region) during a meeting that this is what is coming ... It's a calamity," said Joseph Gbuebo, community secretary for Agga.

"On the 25th of this month, we saw some helicopters flying, dropping some chemicals along the shore, but this has been injurious to our health," he added.

Shell's pipelines in Nigeria's onshore Niger delta have spilled several times. The company usually blames such leaks on sabotage attacks and rampant oil theft.

BP's Macondo well in the Gulf of Mexico ruptured in April last year, spewing nearly 5 million barrels of oil into the sea in what was the worst U.S. marine oil spill. The disaster brought intense negative publicity for BP.

But in Nigera, spills are so commonplace they often go unnoticed by the outside world.

A U.N. report in August criticised Shell and the Nigerian government for contributing to 50 years of pollution in a Niger Delta region that it said needs the world's largest oil clean-up, costing an initial $1 billion and taking up to 30 years.

Separately, the cost of fuel more than doubled in Nigeria a day after the government announced an end to fuel subsidies.

Sign posts at a few gas stations Monday morning put the price at nearly $3.60 per gallon (94 cents per liter), up from about $1.70 per gallon (45 cents per liter) on Sunday.

Many more stations were shut down, while bus and taxi fares had already risen.

The subsidy was one of citizens' few government benefits in the oil-rich nation, and its removal follows the government's Saturday declaration of a state of emergency in some parts of the nation over a growing Islamist insurgency.

Nigeria produces over 2 million barrels per day of crude oil but a lack of investment in refineries and infrastructure means almost all of this is exported, while refined products such as petrol have to be imported at great cost.

Labor unions, who ironically described the holiday move as the president's New Year "gift" to Nigerians, vowed they would fight it.

Reuters and the Associated Press contributed to this report.