Shell Sells Stakes in Nigerian Oil Leases
On November 30, the Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell), (NYSE:RDS.A)(NYSE:RDS.B) completed the assignment of its 30% interest in two oil mining leases and related facilities in the Niger Delta. Total cash proceeds for SPDC amount to some US$488 million.
These divestments are part of Shell's strategy of refocusing its onshore interests in Nigeria and in line with the Federal Government of Nigeria's aim of developing Nigerian companies in the country's upstream oil and gas business.
"As we refocus our portfolio we are strengthening our position for the future," said Peter Voser, Chief Executive Officer of Royal Dutch Shell plc. "The improvement in the security situation in the Niger Delta coupled with continued progress on key projects provides the foundation for further investment and growth."
Shell has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there - both onshore and offshore. Through SPDC and its other Nigerian companies, it responsibly produces the oil and gas needed to fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.
Oil Mining Lease 26 was assigned to the Nigerian company FHN26 Limited, an affiliate of Afren plc, for an amount of some US$98 million (SPDC share). Oil Mining Lease 26 covers an area of some 480 square kilometres and is currently producing around 6,000 barrels of oil per day (100%) from two fields.
Oil Mining Lease 42 was assigned to Neconde Energy Limited, a majority Nigerian-owned consortium consisting of Nestoil Group, Aries E&P Company Limited, VP Global, Kulczyk Investments and Kulczyk Oil Ventures, for an amount of some US$390 million (SPDC share). OML 42 covers an area of some 814 square kilometres and includes the Batan, Egwa, Odidi, Jones Creek fields and related facilities. Operations had been shut down because of militant activity, but production from the Batan field resumed earlier this year and is currently producing circa 15,000 barrels of oil per day (100%).
Total E&P Nigeria Limited (10%) and Nigerian Agip Oil Company Limited (5%) have also assigned their interests in both leases, ultimately giving the buyers a 45% interest.
All approvals have been received from the relevant authorities of the Federal Government of Nigeria and the Nigerian National Petroleum Corporation.
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