Shell inks deals for sale of Nigerian onshore assets
22 Oct 2014
Royal Dutch Shell has sold its four Nigerian onshore oil blocks, called Oil Mining Leases (OML) 18, 24, 25 and 29 along with its Nembe Creek Trunk Line (NCTL), as part of its 2013 plan of divesting assets in the troubled West African country.
Following years of militant attacks on its facilities, oil theft, and oil spills Shell, Europe's largest oil company, had said in 2009 that it is seeking buyers for its Nigerian onshore oil assets.
The Anglo-Dutch oil giant holds stakes through its Nigerian subsidiary, Shell Petroleum Development Co. Along with Shell, Italy's Eni SpA and France's Total SA are also selling their stakes worth a combined $3 billion.
The Hague-based company along with its partners Eni and Total have agreed to sell 45-per cent stake (Shell – 30 per cent, Total - 10 per cent and ENI - 5 per cent) in Oil Mining Lease18 to a consortium led by Canadian company Mart Resources Inc, according to a Wall Street Journal report.
The remaining 55 per cent will continue to be held by the Nigerian National Petroleum Corporation under a joint operating agreement with a consortium led by Mart Resources.
Shell did not disclose financial terms of the deal but Mart Resources said that production from these assets were between 20,000 to 30,000 barrels per day from around 30 wells.
Shell has also signed sale agreements for its 30 per cent stake in oil mining leases (OML) 18, 24, 25, 29, and the 97-kms Nembe Creek oil Trunk Line (NCTL) in Lagos with local start-up companies.
Analysts see Shell and its partners exiting the country mainly due to militant attacks and a number of court cases, which have caused operational headaches for them.
The company has been blamed by locals for the oil spills and environmental damage resulting in attacks on its installations by militants.
Although Shell's assets in the region are worth nearly $5 billion, analysts had earlier said that these assets will not fetch its real worth since they have been target of militant attacks over the past nine years, and Shell has lost hundreds of millions of dollars in profit since 2006. (Related report: Nigerian militants target Chevron, Shell oil installations; capture ship)