Shell Set to Consider Offers for Niger Delta Oilfields

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Shell Plc is set to consider bid offers for its 30% joint venture offer for its oil and gas fields in the Niger Delta. Shell has been on this divestment bid from Nigeria in the last five years.

Bloomberg said yesterday that the Shell was expecting about two additional bids before it raps up the exercise this week.

Some of the Nigerian companies bidding for the Shell divestment in Nigeria include Heirs Oil and Gas Ltd, owned by banker and philanthropist, Mr. Tony Elumelu, and ND Western Ltd, whose chairman is Samuel Dossou-Aworet. The latter is also chairman and CEO of the PETROLIN Group of companies.

Both are bidding for Shell’s 30% interest in the joint venture, which operates assets in the Niger Delta and nearby offshore areas.

It would be recalled that Energy consultant, Wood Mackenzie Ltd. last year, valued Shell’s stake at $2.3 billion, assuming a long-term oil price of $50 a barrel.

But observers say that with Brent now trading at about $121, the stake likely is worth significantly more. Bloomberg said there were no comments from officials of all the companies linked with the offer, including Shell.

Citing hostilities and oil theft, Shell had signaled its intension to sell its stakes in the onshore, offshore operations in the Niger Delta region.

The Dutch company also mentioned in a statement that “its long-term energy transition strategy is incompatible with Nigerian operations, and have become prone to spills and theft.”

Chief executive officer, Ben van Beurden, told shareholders in May that a significant increase in sabotage in recent years had resulted in a state of near-lawlessness that the company couldn’t control.

“In the end, we have to concede that this is beyond what we can do,” he said.

According to a recent McKenzie document, 19 Oil Mining Leases (OMLs) are expected to be put up for sale by the oil giant in onshore locations and shallow waters in the company’s eastern and western operations in the Niger Delta.

Nigeria’s crude production has fallen 25% in last decade Data compiled by Bloomberg with potential future costs related to litigation and environmental liabilities likely to affect the stake’s valuation, two of the people said.

Two other local companies, Seplat Energy Plc and Sahara Group Ltd., Bloomberg said, put non-binding offers for Shell’s assets earlier this year, but the people said they no longer were in the running. The firms didn’t respond to requests for comment, Bloomberg said.

Shell is retaining its deepwater oil assets and its large liquefied natural-gas presence. Shell is not the international oil company desiring to divest from Nigeria, citing hostility and unfavourable business environment.

Exxon Mobil Corp. agreed in February to sell its shallow-water unit to Seplat for about $1.3 billion, and France’s TotalEnergies SE wants to offload its 10% interest in the same joint venture Shell is divesting from.


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