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Shell Rakes in $488m from Sale of 2 Oil Blocks

02 December 2011

Managing Director of SPDC, Mr. Mutiu Sunmonu

By Ejiofor Alike

Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell), has officially confirmed that it earned $488million from the assignment of its 30per cent interest in two Oil Mining Leases (OMLs) – 26 and 42 and related facilities in the Niger Delta.

Chief Executive Officer of Royal Dutch Shell Plc, Mr. Peter Voser said in a statement yesterday that the divestments were part of company’s strategy of refocusing its onshore interests in Nigeria and in line with the Federal Government’s aim of developing Nigerian companies in the upstream oil and gas business.

“As we refocus our portfolio we are strengthening our position for the future. The improvement in the security situation in the Niger Delta coupled with continued progress on key projects provides the foundation for further investment and growth,” he said. Voser said Shell had been in Nigeria for more than 50 years and remains committed to keeping a long-term presence in the country, both onshore and offshore.

He noted that through SPDC and its other Nigerian companies, the company responsibly produces the oil and gas needed to fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

In his remarks, the Managing Director of SPDC, Mr. Mutiu Sunmonu said the company was re-positioning for growth.

“In focusing its operations, SPDC is set to continue its role at the forefront of Nigeria’s oil and gas industry development.  With the support of our Government and other partners, we will continue to look for investment and growth opportunities while supporting the aspirations of the nation and the Nigerian people,” he said.

OML 26 was assigned to the Nigerian company First Hydrogen Nigeria (FHN) 26 Limited, an affiliate of Afren plc, for an amount of some $98 million -SPDC share. OML 26 covers an area of some 480 square kilometres and is currently producing around 6,000 barrels of oil per day – 100per cent from two fields.

Oil Mining Lease 42 was assigned to Neconde Energy Limited, a majority Nigerian-owned consortium consisting of Nestoil Group, Aries E&P Company Limited, VP Global, Kulczyk Investments and Kulczyk Oil Ventures, for an amount of some $390 million -SPDC share. Shell said all approvals had been received from the relevant authorities of the Federal Government and the Nigerian National Petroleum Corporation (NNPC).

OML 42 covers an area of some 814 square kilometres and includes the Batan, Egwa, Odidi, Jones Creek fields and related facilities. Operations had been shut down because of militant activity, but production from the Batan field resumed earlier this year and is currently producing 15,000 barrels of oil per day – 100per cent.

Total Exploration Production Nigeria Limited -10per cent and Nigerian Agip Oil Company Limited – five per cent have also assigned their interests in both leases, ultimately giving the buyers a 45per cent interest.


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