Shell fetches two local bids for Nigerian business: press
Shell is set to receive two final offers for its onshore oil and gas fields in Nigeria this week from local companies, Bloomberg reported on June 8 citing sources.
Nigeria-based Heirs Oil and Gas and ND Western are competing for Shell's 30% stake in onshore consortium SPDC, whose other members are Nigeria's state-owned NNPC with 55%, TotalEnergies with 10% and Italy's Eni with 5%. Shell CEO Ben van Beurden revealed that the major was in talks with the Nigerian government on the sale in May last year.
Explaining the sale, van Beurden said that keeping hold of its Nigerian business, which has struggled for years with spills caused by pipeline sabotage and oil theft, resulting in costly repair work, was incompatible with its energy transition strategy.
In a report last year, energy consultant Wood Mackenzie estimated the value of Shell's interest in SPDC at $2.3bn, but that was assuming a $50/barrel oil price over the long term. Brent is currently trading at over $120/b, suggesting that the stake could fetch more.
WoodMac said the joint venture's assets offered "considerable value upside," but warned potential buyers to "do their homework," given the business' lack of investment, issues with crude theft and insecurity and gas market constraints in Nigeria.