Five Nigerian oil and gas companies plan to bid this month for Royal Dutch Shell’s onshore oilfields in a deal that could fetch up to $3 billion, a report said.
Shell began negotiating last year to sell its stake in Nigerian onshore fields, where it has operated since the 1930s, as part of a global drive to reduce the company’s carbon emissions.
According to reports, the Anglo-Dutch company owns stakes in 19 oil mining leases under Nigeria’s onshore oil and gas joint venture (SPDC).
A 30% stake in the Shell Petroleum Development Company of Nigeria (SPDC) is held by Shell; 55% by Nigerian National Petroleum Corporation (NNPC), 10% by TotalEnergies and 5% by ENI.
Shell has also been dealing with repeated leaks in the Niger Delta because of pipeline theft, sabotage, and operational problems, resulting in expensive repairs and high-profile lawsuits.
The sale has attracted the attention of independent Nigerian oil firms including Seplat Energy, Sahara Group, Famfa Oil, Troilus Investments Limited, and Nigeria Delta Exploration and Production (NDEP), sources said.
At this point, no international oil companies are expected to participate in the bidding. The deadline for bids is January 31.
Due to concerns about environmental issues and corruption in Nigeria, many international banks and investors are wary about oil and gas assets in the country.
Nonetheless, some African and Asian banks were still willing to finance fossil fuel projects in the region.
Troilus has hired Nigeria-based Africa Bridge Capital Management to raise up to $3 billion for the assets.
In addition, any buyer of Shell’s assets must prove that it has the ability to repair any damage caused to the oil infrastructure in Nigeria’s Delta in the near future.