Royal Dutch Shell is close to completing the sale of its stake in four Nigerian onshore oil blocks after receiving bids from several foreign and local companies, industry sources close to the deals said.
Shell said last year it had received interest from a number of bidders for the four blocks it owns along with partners Total <totf.pa, eni=”” and=”” state-oil=”” firm=”” nnpc=”” as=”” it=”” looked=”” to=”” dispose=”” of=”” non-core=”” nigerian=”” assets.<br=””>
The Anglo-Dutch major has not revealed which blocks were for sale but several industry sources have said negotiations are ongoing over blocks OML 30, 34, 40 and 42, which are all onshore developments in the Niger Delta with sizeable proven reserves.
Some of these assets hold over 300 million barrels of proven oil reserves and bids for the largest block have exceeded $1 billion, industry sources said. Shell confirmed on Wednesday four blocks were still on offer but had no further comment.
Shell has said it hopes indigenous companies would bid and analysts believe local players, who are likely to be partnered by foreign oil companies or independent investors, will have the best chance of securing the blocks.
Oil services firm Petrofac said this week its Nigerian partner Seven Energy was bidding for one of the blocks, while local players Oando, Vertex Energy, Niger Delta Ltd and Conoil are all involved in current bids, sources said.
None of these companies were available for comment.
Shell has more onshore oil reserves in Nigeria than any other foreign oil company but it has also suffered some of the toughest challenges working in the vast and volatile wetlands of the Niger Delta, the heart of Africa’s largest energy industry.
Sabotage attacks on pipelines and oil platforms by militants who say they are fighting for a fairer share of the wealth created in their back yard, have cut out large chunks of Shell’s output in the past, some of which will never be restored.
Communities in the Niger Delta blame Shell for years of oil leaks, gas flaring and other side effects from an energy business they benefit little from. Shell was forced to abandon its oilfields in Ogoniland in 1993 due to protests over pollution and a lack of investment in local infrastructure.
Shell has said it views Nigeria as a key part of its business and the sale of these assets, which make up a small portion of its business in the country, is not the beginning of a wider departure from Africa’s most populous nation.