Shell Sells Oil Block For $102m


Shell said Monday it has completed the sale of its share of an onshore oil block in southern Nigeria to a consortium for $102 million, the latest such move involving the Anglo-Dutch group.

A consortium including Scotland-based Eland Oil and Gas, which is focused on West Africa, and Nigeria’s Starcrest will now have a 45-percent share in the block, with state petroleum firm NNPC holding the remaining 55 percent.

The consortium is called Elcrest Exploration and Production Nigeria Limited and is majority Nigerian-owned.

Shell said in a statement its “30 percent interest in Oil Mining Lease 40 in the Niger Delta to Elcrest Exploration and Production Nigeria Limited” was completed last week. The Niger Delta is the country’s main oil-producing region.

Italy’s Agip and France’s Total have also sold their interests in the block to the consortium, bringing its stake to 45 percent.

Shell, whose Nigerian subsidiary SPDC had been the block’s operator, said the sale brought to six the number of onshore lease assignments it had divested since 2010 in Africa’s largest oil producer.

Analysts say the moves appear aimed at increasingly shifting Shell’s focus in Nigeria offshore, where the risks of sabotage and militant attacks are lower.

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The company has spoken of the moves only in general terms and says it is in line with the Nigerian government’s goal of increasing local involvement in the oil industry.

“These divestments mark another step in the strategy to refocus the SPDC portfolio,” SPDC’s chairman Mutiu Sunmonu said in the statement.

Shell said operations in the oil block had been stopped in 2006 because of militant unrest.

Pipelines in the Niger Delta region are regularly damaged by oil thieves seeking crude to sell on the lucrative black market, while militants claiming to be fighting on behalf of impoverished communities have carried out scores of attacks on facilities.

Militant-related violence has sharply declined since a 2009 amnesty deal, but oil theft is believed to be on the rise.

Shell has said there have been estimates that 150,000 barrels of oil and condensate are stolen in the country each day. Nigeria currently exports more than two million barrels per day.

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