Oil and Gas giant Shell Nigeria Development Co Ltd. a subsidiary of Royal Dutch Shell has divested a 30% stake in oil mining lease (OML) 18 and related facilities in the Eastern Niger Delta to Eroton Exploration and Production Company for $737m.
Eroton was established by a consortium of companies, including Mart Resources, Midwestern Oil and Gas and Suntrust Oil and Gas.
The divestment is a part of Shell’s onshore portfolio strategic review and complies with the goal of Nigerian Government’s plan to encourage local companies in the upstream oil and gas business.
Meanwhile, Shell’s partners Total E&P Nigeria and Nigerian Agip Oil Company have also sold their interests of 10% and 5%respectively in the lease to the Eroton.
With these transactions worth $1bn, Eroton will own 45% in OML 18. The remaining 55% is held by the Nigerian National
Petroleum Corporation.
Covering an area of 1,035km2, the OML18 includes the Alakiri, Cawthorne Channel, Krakama, and Buguma Creek fields and related facilities.
The divested infrastructure includes flow stations along with associated gas infrastructure plus oil and gas pipelines within the OML, while the divested fields produced approximately 14,000 barrels of oil equivalent per day (100%) during 2014.
The OML 18’s crude oil production is exported through the Bonny Crude Oil Terminal through the Nembe Creek Trunkline while the gas production is delivered to various power, industrial and commercial customers through the Nigeria Gas Company’s pipeline.
SPDC is the operator of a joint venture that includes the Nigerian National Petroleum (55%), SPDC (30%), Total E&P Nigeria (10%) and Nigerian Agip Oil Company (5%).
The above information was as reported by Oil and exploration development, last year shell had concluded sale of OML’s 24, 25 29 in an effort to reduce its exposure to onshore operations, which are more prone to security threats.
This divestment is also part of the Shell’s global plan to dispose of $15 billion of assets globally in 2014 and 2015.
The sale of these four assets will bring the number of oil blocks sold by Shell to 12 in the last four years, as the oil major had previously sold OMLs 4, 38, 41, 26, 30, 34, 40 and 42 to local investors and their international partners.
Of the eight oil fields previously divested by Shell, only OMLs 4, 38 and 41 are operated by the new buyer, Seplat Petroleum Development Company, while the operatorship of the other five blocks were transferred to the Nigerian Petroleum Development Company (NPDC), the upstream subsidiary of NNPC.
Under the current divestment programme, Shell signed a share purchase agreement (SPA) with the Aiteo Group a Nigerian company, which is acquiring OML 29, the most prolific of the oil assets offered to buyers, and the the 62-mile long Nembe Creek pipeline.
A Shell spokesperson had concluded that Nigeria remains an important part of Shell’s portfolio, where they will continue to have a significant onshore presence in oil and gas, and which has clear growth potential, particularly in deep-water and onshore gas,” Shell remains the major player in Nigeria’s Oil and gas industry.
For Inquiries or Request for Quote, Shell Lubricants, Oil and Gas Chemicals, Welding consumables, fabrication Services
Contact for a quick quote:
Pamela Okeke
Business Development Executive
Epoxy Oilserv Limited Nigeria
(Shell lubricant Distributor Nigeria)
email: Pamela.okeke@epoxyoil.com