Less than a week after the Shell Petroleum Development Company (SPDC) agreed to sell three oil leases to a Nigerian-led multinational consortium, the oil giant announced on Thursday, it was open to selling more assets in Nigeria, where its oil and gas production has again been hit by recent attacks on its facilities.
This position was made public by the company’s Chief Financial Officer, Simon Henry, after the oil major announced fourth-quarter results for 2009.
“The onshore SPDC production, this is Shell’s 30 percent share, is 175,000 barrels per day (bpd) in the fourth quarter (Q4) last year, down about 150,000 bpd today, due primarily to attacks in the last few days on flowlines,” he said.
Shell confirmed on Sunday, it had shut down three pumping stations in the Niger Delta following an attack by MEND on the Trans- Ramos pipeline, a key crude pipeline. But it did not give details of how much output had been affected.
Sources say the attack had stopped production from the Forcados stream, which averaged around 150,000 bpd of production in 2009.
Assets sale
Oil industry analysts say that the oil major was considering selling about $5 billion worth of its Nigerian onshore and shallow assets. Peter Voser, Shell Chief Executive, confirmed this on Thursday when he revealed that the company may sell more of its Nigerian assets.
“Nigeria is part of our total portfolio and if values are right we will always look at them and see if potential asset sales can actually give us more value than operating them ourselves.”
The oil major revealed last week Friday it had agreed to sell its stake in three onshore oil licences in Nigeria to a consortium consisting of two local firms and France’s Maurel & Prom.
Analysts said Shell was likely to sell onshore fields where there have been problems or those not yet producing oil, but this would not deter interest from potential buyers.
The SPDC is looking to sell smaller producing fields, particularly those where security issues have shut in production and undeveloped blocks.
According to Austin Avuru, chief executive officer of Platform Petroleum, one of the companies in the consortium that bought the three oil licenses from Shell,
“We know that security is the major risk that we’ll face. It is also a risk we think we can manage better than the multinationals. So, it’s part of the reason we were considered to come in.”
Although the Nigerian National Petroleum Corporation (NNPC), who has majority stake in all the Joint Ventures, is yet to comment on the planned sale by Shell, any agreement reached with prospective buyers is subject to the approval of the Federal Government of Nigeria and the NNPC, who hold the proprietary interest in the fields.