Shell Braces To Offload N720bn Assets In Niger Delta

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Anglo-Dutch oil and gas super major, Shell, is currently making a seeming frantic efforts to offload two of its assets in the Niger Delta, Nigeria’s main oil and gas region, to local producers.
The assets, according to the oil major, is collectively worth $2.00 billion, around N720 billion. Insiders say the company is set to do away with its oil mining licenses 11 and 17.
The deal, according to Shell insiders, will involve selling essential infrastructure assets which include a natural gas-fired power plant that will be managed by Tony Elumelu’s company, Transactional Corporation of Nigeria Plc (Transcorp).

Initially, talks between the big oil firm and the local buyers were at an advanced stage, but faced complications due to lack of financing. The oil mining licence 17 falls within oil corporation NNPC/Shell joint venture and includes 15 oil and gas fields, out of which six are actively producing oil at the moment.

Oil mining licence 11 is one of the biggest blocks in Eastern Nigeria and has 33 oil and gas fields, eight of which were producing as of 2017. The Federal Government had supposedly divided the block into three portions in April, offering one to Shell after it confirmed renewal of its production licence.

Incidents such as local oppositions, militant activities, civil conflict, and allegations of environmental pollution, had shrouded the company in controversies and exiting the two oil blocks may reduce Shell’s exposure in Nigeria.

Once the deal goes through, Shell will be focusing on deep water operations where the frequency of theft and threat of attacks on infrastructure are low. Shell’s origin in Nigeria dates to 1936 when Shell D’Arcy was founded, the group’s first company in the nation.

In 1938, it was granted an exploration licence and in 1950, after discovering oil in the region, Shell became one of the biggest producers in West Africa. Related Shell to sell two oil assets for $2.00 billion in Nigeria July 24, 2018 Etete, ENI, Shell go on trial over Nigeria’s Malabu kickback scandal March 5, 2018

The Shell Petroleum Development Company of Nigeria Limited (SPDC) today agreed to transfer its interest in three production licences and related equipment in the Niger Delta to a consortium led by two Nigerian companies, adding however that the transfer was subject to government approval. January 30, 2010.

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