Shell divests stake in Nigerian oil asset

Shell Petroleum Development Company of Nigeria (SPDC) has completed the divestment of its 30% interest in oil mining lease (OML) 40 located in the Niger Delta.

The OML covering an area of some 498km² has been sold to Elcrest Exploration and Production Nigeria for a total consideration of $102m.

Shell Petroleum country chairman in Nigeria Mutiu Sunmonu said the divestment is another step to re-focus the company’s portfolio.

“SPDC is positioned well for investment and growth opportunities in all areas, including domestic gas, which will be delivered with the support of our government, partners and the people of Nigeria,” said Sunmonu.

The divestment is part of the company’s strategy to refocus its onshore interests in the nation, in line with the Nigerian federal government’s aim of developing local companies.

Elcrest Exploration and Production Nigeria is a majority Nigerian-owned consortium consisting of Starcrest Nigeria Energy Limited and Eland Oil and Gas.

OML40 was shut down in 2006 because of militant activity, and includes the Opuama, Abiala and Adagbassa Creek fields and related facilities.

Buyers have a 45% interest, after Total E&P Nigeria and Nigerian Agip Oil Company assigned their respective 10% and 5% interests in the OML.

Federal Government of Nigeria and the Nigerian National Petroleum granted all relevant approvals for the sale.

Shell Petroleum has completed six onshore lease assignments in Nigeria since 2010.

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Image: Shell Oil Company’s headquarters in Houston, US. Photo: Eric V. Blanchard.