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Nigeria: Shell to Quit Country This Year

Leadership (Abuja)

Ese Awhotu With Agency Report

7 January 2010

Indications have emerged that oil giant Shell is planning to quit Nigeria and 19 other African nations this year. Realignments are already in the offing following reports that the oil dealer is planning to quit 20 African countries.

Shell had made a brisk move of actualising its plans to quit Nigeria with the intended sale of its assets in the country valued at about $5 billion.

The Federal Government reacted swiftly that this was not possible for the oil and gas giant to sell its assets in Nigeria without necessary approvals.

Local dealers who have a business relationship with the firm, confirmed to Kenyan newspaper Daily Nation that Shell intends to sell its refinery, storage and retail businesses from nations where it still operates.

Shell communications manager East Africa, Ms Victoria Kaiga, confirmed that the firm is reviewing its global downstream business, according to the report posted online by the Royal Dutch Shell Plc.

“Like any competitive business, Shell actively manages its global portfolio and is always seeking opportunities to improve profitability. We continuously review our global downstream portfolio in line with our more upstream, profitable approach to capital allocation,” said Ms Kaigai.

The firm recently disposed of businesses in Greece and expects to sell refineries in the United Kingdom and Germany.

Ms Kaigai denied reports that Shell is in talks with any third parties to sell downstream business in Africa.

On January 4, the French state-funded public broadcaster Radio France Internationale reported that Shell is expected to make a partial withdrawal from the African continent this year.

In 2008, Royal Dutch Shell, Europe’s largest oil company, moved away from 15 African countries, although it holds on to its most lucrative activities: exploration and production.

Oilibya and Morocco Oil are said to be eying the firm’s North Africa assets while in southern Africa, Engen Petroleum Ltd is said to be interested. If Shell goes ahead to pull out of Kenya, Total will remain the single largest global brand in the local retail petroleum business.

Shell had positioned itself in the market with earlier acquisitions of Agip and BP, but seems to be reeling from growing competition from local and Asian firms.

Over the recent years other global petroleum brands such as Esso, Agip, Mobil, BP, and Caltex (Chevron) have vanished, leaving only two global brands – Shell and Total – which combined control about 45 per cent of the Kenyan market.

Mobil was bought by OilLibya, owned by the government of Libya through Tamoil, while Caltex was recently taken over by Total.

The report comes as Shell officials have been insisting their BP investment is long term.

On December 20, Reuters had reported that Shell was selling oil fields in Nigeria valued at up to $5 billion.

In Nigeria Shell has been seriously embattled with several court cases and allegations of environmental malpractices, coupled with series of attack on its facilities by angry militants operating in the Niger Delta, the home of Nigeria’s oil wealth.

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