November 25, 2007
Grant Ringshaw
OIL giant Shell is considering selling stakes in two offshore Nigerian oil and gas projects to CNOOC, the Chinese state-controlled company, in a deal worth about $900m (£437m).
Shell holds stakes of 49.8% in each of the projects. Bankers said that CNOOC is likely to view the operations as prize assets as the Chinese group seeks to expand its interests in Africa aggressively.
Analysts said that the potential deal shows that Shell is prepared to take hard decisions. It has had a troubled time in Nigeria, where its interests in the delta region have been attacked by militants.
It has also been hit by problems with shortfalls in Nigerian government funding for joint-venture projects and fears that profits could be squeezed if the government presses ahead with plans to increase its share from lucrative offshore contracts.
Last week, Shell said it would reorganise its operations in Nigeria by merging the production, development and projects divisions of three separate business units in the country.
The deal comes after CNOOC was linked earlier this month with a possible acquisition of Shell’s interests in Australia’s North West Shelf oil and gas project. Analysts believe the deal could be worth about $450m.
CNOOC is thought to have hired Australian investment bank Macquarie, to advise on the deal.
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article2935714.ece
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