Royal Dutch Shell has placed more of its onshore oil assets in Nigeria for sale with at least five Nigerian oil and gas companies preparing to submit their respective bids for the acquisition of the assets this month.
The deal was estimated to fetch up to $3 billion, Reuters quoted
three sources involved in the process to have said.
Shell last year started discussions with the federal
government about selling its stake in the onshore fields, where it had been
active since the 1930s, as part of a global drive to reduce its carbon
emissions.
The Anglo-Dutch company has stakes in 19 oil mining leases
in Nigeria’s onshore oil and gas joint venture (SPDC), which the industry and
banking sources said were valued at between $2 billion to $3 billion.
Shell operates SPDC (Shell Petroleum Development Company of
Nigeria) and holds a 30 per cent stake in the venture.
The Nigerian National Petroleum Company (NNPC) Limited holds
55 per cent, TotalEnergies has 10 per cent and ENI five per cent.
Shell has also struggled for years with spills in the Niger
Delta due to pipeline theft and sabotage as well as operational issues, leading
to costly repairs and high-profile lawsuits.
The sale has drawn interest from independent Nigerian oil
and gas firms including Seplat Energy Sahara Group, Famfa Oil, Troilus
Investments Limited and Niger Delta Exploration and Production (NDEP), sources
said.
No international oil companies were expected to take part in
the bidding process at this point, the sources said, adding that bids were due
by January 31.
A Shell spokesman declined to comment. Sahara Group said it
did not comment on market speculation.
NNPC could also choose to exercise its right to pre-empt any
sale to a third company, the sources said.
They said it was unclear whether potential bidders could
raise sufficient funds as many international banks and investors have become
wary about oil and gas assets in Nigeria due to concerns about environmental
issues and corruption.
Some African and Asian banks, however, were still willing to
finance fossil fuel operations in the region, they said.
Troilus has hired Nigeria-focused Africa Bridge Capital
Management to raise up to $3 billion for the assets, according to sources and
documents seen by Reuters. Africa Bridge Capital reportedly declined to
comment.
Any buyer of Shell’s assets will also need to show it can
deal with future damage to the oil infrastructure which has ravaged Nigeria’s
Delta in recent years, the sources said.
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