THE biggest oil producing company in Nigeria, Royal Dutch Shell, is said to be considering selling $900 million (about N120 billion) worth of interest in Nigerian offshore blocks, OML 125 and OML 134, as it restructures its business in Nigeria and reduces its investments in the country.
The news comes following Shell�s recent unveiling of its restructuring plans to cut costs and jobs at its Nigerian operations following months of unrest in the Niger Delta and pressure by the Federal Government to renegotiate contracts.
Nigerian Tribune gathered that the oil major planned to divest the assets not only because it wants to cut the exposure of its portfolio to Nigeria, but also because the blocks are operated by another company, Eni SpA (E), a person involved in the possible deal said.
That person said the stakes could fetch $700 million to $900 million altogether.
When the Nigerian Tribune contacted a Shell official on the planned sale, he declined to comment.
�The situation in Nigeria certainly isn�t peaceful, but I don�t think it is such as to push oil majors to leave,� said Eni�s Chief Executive, Paolo Scaroni, on the sidelines of a ceremony in Rome, Italy, when asked to comment on Shell�s possible exit from the blocks.
The two stakes, each of 49.8 per cent – and owned through Shell Nigeria Exploration and Production Co. Ltd. – are in deep water blocks OML-125 and OML-134, the latter formerly known as OPL-211. Agip, a unit of Eni, owns the remaining 50.2 per cent in each block.
OML-125 produced 12,000 barrels a day of oil net to Eni in 2006.
During 2006, Agip made a new discovery of both oil and gas in a well located in the block. OML-134 is still in exploration phase.
Shell is losing 189,000 barrels a day of output from its 30 per cent share in one of its ventures, Shell Petroleum Development Co. Ltd., after it was mothballed in the wake of attacks on facilities and staff by militants groups seeking a greater share of oil revenues.