Royal Dutch Shell Plc  .com Rotating Header Image

Shell to sell at least 4 more Nigeria oil blocks -sources

Screen Shot 2013-01-29 at 14.38.10

Wed Jul 31, 2013 10:33am EDT

* Oil majors scaling back onshore, shallow water Nigeria

* Two blocks lie in region hit by oil theft, spills

* Nigerian firms, partnered with foreign, expected to bid

By Joe Brock

ABUJA, July 31 (Reuters) – Royal Dutch Shell will sell at least four more oil blocks in Nigeria in its latest divestment from Africa’s top oil exporter, three oil industry sources familiar with the deals said on Wednesday.

The blocks are Oil Mining Licenses (OMLs) 13 and 16 onshore the Niger Delta, and OML 71 and 72, which are in shallow water, the sources told Reuters. A Shell spokesman declined to comment.

OML 13 and 16 lie in the Ogoniland region where Shell has experienced long-running disputes with local communities, multiple oil spills and widespread pipeline sabotage and theft.

OML 13 covers a large geographical area and has big gas reserves, while OML 16 is a much smaller asset, sources said. OML 72 has proven oil reserves of around 120 million barrels, while OML 71 has significantly lower reserves, one source said.

Shell has been discussing renewing these licenses with the Nigerian government for years but has yet to reach a deal.

The blocks are in joint ventures, with the Nigerian National Petroleum Corp. (NNPC) owning 55 percent, Shell 30 percent, Total 10 percent and Eni 5 percent. In all previous deals, Total and Eni have also sold their shares.

Eni declined to comment and Total had no immediate comment on what their plans were for their stakes in the blocks.

Shell said in June that it was considering further sale of assets in the eastern Niger Delta, where it has security problems – although it has never publicly connected the two.

The oil major said then that it was still committed to Nigeria long term. It has already sold eight Niger Delta licences for a total $1.8 billion since 2010.

OTHERS SELLING

Chevron is also selling five shallow water blocks, while fellow U.S. firm ConocoPhillips is selling its Nigerian businesses to Oando Energy for about $1.79 billion.

Despite a scale-back by foreign firms onshore and in shallow water in recent years, oil majors like Shell, Exxon Mobil and Chevron remain keen on expanding deep offshore, where terms are more favourable and security risks reduced.

Nigeria’s “local content” policy means Shell’s latest assets will likely have to be sold to local firms, although in previous deals smaller foreign partners usually supported the bids.

Shell is in talks with NNPC about the sales initially before approaching potential buyers, two sources said.

In previous deals rows over who would take over from Shell as operator of the blocks slowed down sales because some buyers initially thought they would run the blocks before NNPC’s operating arm NPDC took up its right to be the operator.

Potential buyers will want clarity on who will operate the blocks, what steps will be taken to tackle security issues and who will manage Shell’s infrastructure before a value can be put on each of the assets, the sources said.

SOURCE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.