Four oil Blocks for sale in Niger Delta

Shell has offered some of its oilfields in the Niger Delta valued at between $150 mn to $2 bn for sale.

The onshore blocks located in Southern Nigeria, according to sources familiar with the deal, include Oil Mining Leases (OMLs 26, 30, 34, 40 and 42), some of which contain reserves of up to two billion barrels. Also to be sold with oil blocks are the facilities located in that region where the industry has faced repeated militant attacks.

It was gathered that the oil giant has selected a few of the local companies from among the 30 local firms that submitted expression of interest in the deal, which is expected to be completed within weeks. To qualify, the companies had to prove they had the financial and technical means to implement a development plan for the fields.

Royal Dutch Shell, a major operator in the Nigeria Oil and Gas sector, has suffered a series of setbacks in its Nigerian operations as security and funding challenges have severely cut the company’s onshore production in Nigeria and increased direct costs.


Output decreases

The company’s Chief Executive, Peter Voser, late last year confirmed that the oil giant’s onshore output had dropped to 120,000 barrels per day (bpd), from the approximate 300,000 bpd being produced before the militancy escalated in the Niger Delta region.

Last year, Shell offered three of its oil blocks, OMLs 4, 38 and 41 for sale. Timesonline had reported that the company launched a formal sales process that was being overseen by the previous Head of Shell Nigeria, Ann Pickard.  Most of Shell’s fields are onshore and it was learnt  that the divestment programme is focused primarily on those in the western part of the country.

Explaining the company’s divestment in the three blocks earlier this year, Country Chairman of Shell Nigeria cum Managing Director, Mr. Mutiu Sunmonu, said it was aimed at encouraging local participation in the upstream petroleum industry.

He declared that Shell had no plans to close its operations in Nigeria despite the tough operating conditions.
Sunmonu acknowledged that security and funding challenges have severely cut the company’s onshore production in Nigeria and increased direct costs, but that notwithstanding, the company will continue its onshore and offshore exploration and production activities in Nigeria believing that the country’s Oil and Gas sector will see a better future.


Committed to Nigeria

Mr Sunmonu said Shell has a long standing presence in Nigeria and will continue its exploration and production activities in the country notwithstanding the challenges.

“The assets were sold to encourage local participation in the industry. The Federal Government wants to open up the industry to other players especially local players, in line with the local content policy. Shell is one company that has supported this government initiative. So it is a big boost to the local content”.

Explaining the rationale for the divestment in OMLs 4, 38 and 41, Sunmonu said: “Shell has a large and diversified global upstream portfolio, which we regularly review to ensure best value for the company.

“We believe that these assets are best developed by a third party and that the divestment provides an opportunity for local companies to materially increase their participation in the hydrocarbon sector, consistent with the objectives of the Federal Government. It may also accelerate the exploration and development of the acreage. The transaction is subject to the approval of the Nigerian National Petroleum Corporation (NNPC) and the Federal Government,” he added.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W:

twn Are you sure that you want to switch to desktop version?