Ajumogobia: Shell JV Oil Blocks, Nine Divested Blocks to Expire in 2019

A former Minister of State for Petroleum, Mr. Odein Ajumogobia has stated that all the onshore oil blocks belonging to the Shell Petroleum Development Company (SPDC) and nine other blocks sold to indigenous operators by the oil giant and its partners would expire by 2019.

Speaking at a dinner organised at the weekend by the members of The Petroleum Club in Lagos, Ajumogobia listed the divested assets expiring in 2019 to include Oil Mining Leases (OMLs) 18, 24, 25, 26, 29, 30, 34, 40, and 42.

Ajumogobia is also the Chairman of First Exploration & Petroleum Development Company Limited (First E & P), which paid $300 million to Shell and partners for 45 per cent stake in OML 71 and 72.

In 2011, Neconde Energy paid $585 million to Shell, Total and Eni to acquire their 45 per cent stake in OML 42.

Shoreline Energy Resources paid $850 million to Shell and its partners for their 45 per cent stake in OML 30.

Eland Oil paid $154 million for Shell, Total and Eni’s 45 per cent stake in OML 40; ND Western paid $600 million for OML 34; while First Hydrocarbon Nigeria, partly owned by Afren paid $98 million to acquire Shell’s 30 per cent interest in OML 26.

Under the more recent divestment, Erotron Consortium paid $1.2 billion to Shell, Total and Agip for 45 per cent stake in OML 18; Pan Ocean paid $900 million for OML 24.

Creststar Consortium paid initial deposit of $100 million of the $500 million bid price for OML 25 before the NNPC came forward to exercise its right of first refusal, an action being challenged in the court by the Canadian firm-backed consortium.

Of greater significance in the wave of divestments was the $2.562 billion paid to Shell, Total and Agip by Aiteo-led consortium for the plum OML 29 and the Nembe Creek Trunkline.

But the former petroleum minister, who spoke on “Asset Disposals: Issues and Challenges,” said Shell would likely divest more blocks in line with its strategy to re-position its oil portfolio deepwater.

According to him, all onshore blocks except OMLs 23, 28, 35, which are vital for gas supply to the Nigeria LNG Limited could be open for discussion

“Asset divestment / disposals in the oil and gas industry is expected to continue in the foreseeable future. Up to $12 billion of the portfolios of IOCs are potentially up for grabs.