Nigerian independents jostle for Shell onshore oil stakes
igerian independent oil
are jostling to snap up onshore oil stakes of the Shell Petroleum Development Company, SPDC even as the company is yet to conclude talks with the petroleum ministry and the Nigerian National Petroleum Corporation, NNPC.
SweetcrudeReports gathered that while the federal government is pushing back and trying to convince the management of Shell to reconsider their divestment plan, the government is equally fending off pressure from independent producers.
Ben van Beurden, the CEO of Royal Dutch Shell had disclosed last week that the company is in talks with the Nigerian government to sell its stake in onshore oilfields.
Shell, the operator of the West African country’s onshore oil and gas joint venture SPDC, has struggled for years with spills in the Niger Delta as a result of pipeline theft and sabotage as well as operational issues. The spills have led to costly repair operations and high-profile lawsuits.
Speaking at the company’s annual general meeting, CEO Ben van Beurden said that Shell can no longer be exposed to the risk of theft and sabotage.
“We cannot solve community problems in the Niger Delta, that’s for the Nigerian government perhaps to solve. We can do our best, but at some point in time, we also have to conclude that this is an exposure that doesn’t fit with our risk appetite anymore,” van Beurden said.
“We’ve drawn that conclusion, and we’re now talking to the Nigerian government on the way forward.”
Nigerian Oil Minister Timipre Sylva confirmed the government was in talks with Shell on how to divest its onshore stakes.
The sides are considering transferring the stakes to SPDC or to another local company or selling it to a foreign company, Sylva said in a statement.
In February, a Dutch court held Shell’s Nigerian subsidiary responsible for multiple oil pipeline leaks in the Niger Delta and ordered it to pay unspecified damages to farmers, leading van Beurden to call its Nigerian onshore assets as a “headache”.
Last year Shell also lost a Nigerian high court case that could lead to $44 million in damages for spills.
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