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Oil price slump: fire sale of Shell assets gathers pace

Screen Shot 2014-11-20 at 15.07.17*Royal Dutch Shell Plc has sold a $600 million stake in a Nigerian oil lease as part of its plan to sell off $15bn worth of assets around the world. The fire sale no doubt has added momentum in view of the collapse in the price of oil. Shell has already disposed of under-performing assets in Australia, the USA and in the North Sea. Bloomberg News has reported that Shell may close its Draugen oil field in the Norwegian Sea a decade earlier than intended because of rising costs and the slump in oil prices. According to a Wall Street Journal report, Shell is claiming that it has sold its stake in a set of oil wells and processing plants in the Niger Delta because the company has struggled with oil theft and other security issues. Guess a fire sale is better than Nigerians ending up being hanged for protesting against decades of Shell’s plunder and pollution in Nigeria, exploiting a succession of corrupt regimes.

THE HAGUE, the Netherlands, November 20, 2014 /PRNewswire/ —

The Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell)(NYSE: RDS.A)(NYSE: RDS.B), has completed the assignment of its 30% interest in Oil Mining Lease 24 (OML24) and related facilities in the Eastern Niger Delta to Newcross Exploration and Production Limited (Newcross). Total cash proceeds for Shell amount to some $600 million.

This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business.

Shell has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there, both onshore and offshore. Through SPDC and its other Nigerian companies, Shell responsibly produces the oil and gas needed to fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

OML24 covers an area of some 430 square kilometres and includes the Awoba, Awoba Northwest and Ekulama fields and related facilities. The divested infrastructure includes three oil flow-stations and three gas processing plants, in addition to various oil and gas pipelines. The divested fields produced on average around 13,000 barrels of oil equivalent per day (100%) during the first half of 2014.

Total E&P Nigeria Limited (10%) and Nigerian Agip Oil Company Limited (5%) have also assigned their interests in the lease, ultimately giving Newcross a 45% interest.

All approvals have been received from the relevant authorities of the Federal Government of Nigeria.

FULL PRESS RELEASE INCLUDING CAUTIONARY NOTE

*Introduction in red text by John Donovan.

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