Royal Dutch Shell has reportedly started talks for the potential $2-billion sale of two disputed Nigerian oil licenses and their infrastructure assets, according to Bloomberg, after four years of failed attempts to offload the contentious assets.
This latest round of talks reportedly are taking place with a Nigerian entity that has not secured financing for the deal, and like similar talks before this, they may run into a brick wall.
Shell has been trying to refocus its Nigerian operations offshore to avoid unending local opposition to its activities, on-again-off-again militant attacks on its assets, and a quagmire surrounding accusations that it destroyed the Niger Delta with spills and failed to clean up after itself.
Offshore, everything is less risky.
But these remaining two licenses have proven tricky to unload. They include blocks 11 and 17 in Ogoniland, and the prospective buyer is Heirs Holding Ltd., according to Bloomberg, and its controlled by Nigerian tycoon Tony Elumelu.
In 2015, Shell agreed a $84-million settlement deal with the residents of an Ogoniland community over two major oil spills in 2008 and 2009.
A United Nations report from 2011 on the Ogoniland region in the Niger Delta criticized both Shell and the Nigerian government for decades of pollution, with the UN estimating that it would take 25 years and $1 billion (initially) to clean it all up.
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Late last year, Amnesty International called Nigeria and international institutions to investigate the company over a series of alleged crimes committed by the Nigerian military government in Ogoniland in the 1990s.
Crude oil theft on Shell’s pipeline network resulted in a 50-percent increase in oil losses, according to the company’s 2017 sustainability report released in April. Theft resulted in losses of around 9,000 bpd in 2017, more than the 6,000 bpd lost in 2016 and less than the 25,000-bpd loss in 2015.
Earlier this week, Shell’s Nigerian unit ended two month long force majeure on Bonny Light exports because of the shutdown of the Nembe Creek pipeline, which led to the accumulation of stockpiles of unsold crude.
By Damir Kaletovic for Oilprice.com