NigerianEye is an Independent News update provider. Our sole aim is to keep our readers informed and aware of happenings in Nigeria and around the world.
Oil Block Divestment: Shell, Others To Leave Nigeria?
http://www.africaeagle.com/2014/09/oil-block-divestment-shell-others-to.html
There are strong indications that the wave of planned sales of onshore Nigerian assets by major oil companies indicate that they are finally leaving Nigeria. The Niger Delta region has been a major source of oil theft, illegal bunkering and community unrest. Recently, in a move perceived to be motivated by costing saving and risk curbing, Shell announced it has concluded plans to sell four oil fields which it operated in Nigeria.
The process actually began last year when Shell put its 30 per cent shares in four oil wells in the Niger Delta, with Oil Mining Licenses (OMLs) 18, 24, 25, 29, and a key pipeline, Nembe Creek Trunk Line, for sale.
Shell’s new CEO, Ben Beurden, had promised, immediately after taking office, to improve the financial performance of the company through multiple asset sales and cut backs. There are speculations over the price of the sale, with some sources indicating $5 billion and others settling for $3 billion.
Shell isn’t the only major oil company seeking to divest assets and boost profits; other companies like Chevron and Total are reportedly looking to exit the country due to incessant oil spills and industrial sabotage and theft of about 150,000 barrels per day.
“If Shell can achieve this sort of price for these assets, it will have achieved three objectives: firstly reduced its exposure to troublesome onshore Nigeria; second, cut its net capital expenditure spend; and third, increased the free cash it can spend on share buybacks and dividends, all of which we believe the market will like,” said Ian Reid, an oil analyst at the Bank of Montreal.
Because of its 30 per cent stake, Shell would only receive 30 per cent of the proceeds from the sale. Other stakeholders of the oil blocks include the Nigerian National Petroleum Corporation (NNPC) and Total of France.
However, a source within Shell Petroleum Development Company (SPDC) of Nigeria emphasised that the company was not abandoning the country, but would make an announcement when the sale is successfully completed.
“Nigeria remains an important part of Shell’s portfolio, where we will continue to have a significant onshore presence in oil and gas, and which has clear growth potential, particularly in deep water and onshore gas. Shell has a history of over 50 years in Nigeria and remains committed to the country and to supporting the government of Nigeria in their plans for the oil and gas sector,” he said.
Since the murder of Ken Saro Wiwa, an environmental activist, Shell has been at loggerheads with the communities in Ogoniland over alleged complicity.
Shell remains the highest upstream operator in the country with over one million barrels per day production from its assets at onshore, offshore and deep-offshore locations.
Source: Tribune
The process actually began last year when Shell put its 30 per cent shares in four oil wells in the Niger Delta, with Oil Mining Licenses (OMLs) 18, 24, 25, 29, and a key pipeline, Nembe Creek Trunk Line, for sale.
Shell’s new CEO, Ben Beurden, had promised, immediately after taking office, to improve the financial performance of the company through multiple asset sales and cut backs. There are speculations over the price of the sale, with some sources indicating $5 billion and others settling for $3 billion.
Shell isn’t the only major oil company seeking to divest assets and boost profits; other companies like Chevron and Total are reportedly looking to exit the country due to incessant oil spills and industrial sabotage and theft of about 150,000 barrels per day.
“If Shell can achieve this sort of price for these assets, it will have achieved three objectives: firstly reduced its exposure to troublesome onshore Nigeria; second, cut its net capital expenditure spend; and third, increased the free cash it can spend on share buybacks and dividends, all of which we believe the market will like,” said Ian Reid, an oil analyst at the Bank of Montreal.
Because of its 30 per cent stake, Shell would only receive 30 per cent of the proceeds from the sale. Other stakeholders of the oil blocks include the Nigerian National Petroleum Corporation (NNPC) and Total of France.
However, a source within Shell Petroleum Development Company (SPDC) of Nigeria emphasised that the company was not abandoning the country, but would make an announcement when the sale is successfully completed.
“Nigeria remains an important part of Shell’s portfolio, where we will continue to have a significant onshore presence in oil and gas, and which has clear growth potential, particularly in deep water and onshore gas. Shell has a history of over 50 years in Nigeria and remains committed to the country and to supporting the government of Nigeria in their plans for the oil and gas sector,” he said.
Since the murder of Ken Saro Wiwa, an environmental activist, Shell has been at loggerheads with the communities in Ogoniland over alleged complicity.
Shell remains the highest upstream operator in the country with over one million barrels per day production from its assets at onshore, offshore and deep-offshore locations.
Source: Tribune
