Shell to Sell Four More Onshore Oil Blocks

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Shell to Sell Four More Onshore Oil Blocks

11 Oct 2013


Chika Amanze-Nwachuku with agency report



Oil giant, Shell, will sell four more onshore oil blocks in Nigeria in its latest divestment from the country, Reuters has reported.


The blocks, with a combined production of around 70,000 barrels per day (bpd), are oil mining licences (OMLs) 18, 24, 25 and 29, located in the Niger Delta, where production on some fields is peaking and operations are plagued by incessant oil theft and frosty community relations owing partly to frequent spills.

The Anglo-Dutch super major said in June that it planned a strategic review of its eastern delta assets, a development, which industry sources blamed on incessant attacks on its oil facilities.
“The review is ongoing and therefore we are not in a position to confirm which, if any, blocks may be put up for sale”, Reuters quoted a Shell Nigeria spokesman, Mr. Precious Okolobo, to have said.

“Nigeria remains an important part of Shell’s portfolio, where we will continue to have a significant onshore presence in oil and gas,” he added in an e-mailed response to Reuters.
Shell, in August, had announced that it had put up four oil blocks for grabs in Nigeria in its latest divestment from the country.

The blocks offered for sale were OMLs 13 and 16, located onshore the Niger Delta, and OMLs 71 and 72 are in shallow waters.

OML 72 has proven oil reserves of around 120 million barrels, while OML 71 has significantly lower reserves, the newswire quoted a source to have said.

The two onshore blocks lie in the Ogoniland region where Shell has experienced long-running disputes with local communities, multiple oil spills and widespread pipeline sabotage and theft.
The source also confirmed that the OML 13 covers a large geographical area and has big gas reserves, while OML 16 is a much smaller asset.

Shell has been discussing renewing these licences with the federal government for years but has yet to reach a deal, the report added.

The oil blocks, earlier listed for sale, are in joint ventures with the Nigerian National Petroleum Corporation (NNPC), which controls 55 per cent, while Shell and its multinational partners, Total and Eni, control 30 per cent, 10 per cent and five per cent respectively. In all previous deals, Total and Eni have also sold their shares.

Since 2010, Nigeria has had a policy of encouraging more direct ownership of its oil and gas by Nigerians, either through the state oil company or by local private firms. That has raised concerns among foreign oil majors that they may lose smaller assets if they do not sell now, the newswire quoted industry sources as saying.

Four years after militant attacks against oil companies in the Niger Delta ended with an amnesty offer, they remain a major target for oil thieves, whom Chatham House says stole 100,000 barrels a day in the first quarter of this year.

Chevron Nigeria is also considering bids this week from prospective buyers of three oil blocks in the oil-rich Niger Delta with total reserves of around 134 million barrels. The acreages are OMLs 52, 53 and 55 located in the Niger Delta from where the company wants to dispose 40 per cent stake, just as it did on OMLs 83 and 85 operated as a joint venture with the NNPC.

Nigeria usually pumps 2 million to 2.5 million barrels per day of oil, most of which are exported.


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