Shell takes further steps away from Nigeria with its divestment of onshore portfolio
Abuja, Nigeria | – The Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell), has completed the sale of its interest in oil mining lease (OML) 29 and the Nembe Creek Trunk Line (OML29 and NCTL) and related facilities in the Eastern Niger Delta.
Its interests in OML29 and the Nembe Creek Trunk Line were sold to Aiteo Eastern E&P Company Limited. Total cash proceeds for Shell amount to some $1.7 billion in a company press release.
”This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business”. The Anglo-Dutch supermajor said in a statement.
OML29 covers an area of 983 square kilometres and includes the Nembe, Santa Barbara and Okoroba fields and related facilities. The Nembe Creek Trunk Line is 100 kilometres long and has a capacity of 600 thousand barrels per day. It was commissioned in 2010 and evacuates crude to the Bonny Crude Oil Terminal (BCOT). BCOT is not part of the transaction and will remain owned & operated by the SPDC JV.
The divested infrastructure includes flow stations together with associated gas infrastructure plus oil and gas pipelines within the OML. The divested fields produced on average around 43,000 barrels of oil equivalent per day (100 percent) during 2014. Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited have also sold their interests of 10-percent and 5-percent respectively in the lease, ultimately giving Aiteo Eastern E&P Company Limited a 45-percent interest in OML29 and the Nembe Creek Trunk Line. All approvals have been received from the relevant authorities of the Federal Government of Nigeria.
Shell last week sold its stake in oil mining lease 30 to a separate rival for $737 million.
Shell in 2013 said the rising operational challenges in Nigeria, including theft of crude by organized gangs and pipeline vandal attacks, had eroded its profit margin by $250 million.