Shell Divests Two More Nigerian Blocks

According to reports, Shell subsidiary Shell Petroleum Development Co. (SPDC) has offloaded two more of its blocks in Nigeria, ML 30 and OML 40.

Shell put four onshore blocks up for sale last year, OMLs 30, 34, 40, and 42. In March it was rumored that the list of winners had been  narrowed down, apparently two of those awards have now been made public.

Rumor has it that Nigerian firm Conoil will be the lucky recipient of Shell’s stake in OML 30 in the Niger Delta. The indigenous firm is said to be the front-runner for the Shell stake though the deal has not been finalized.

Dow Jones Newswire has it that other bidders for OML 30 had been told Conoil was the winner, and Conoil itself was said to have confirmed the award. There were reportedly three indigenous firms backed by international companies bidding for OML 30.

Any potential deal is subject to Nigerian government approval.

Last week it was announced that Elcrest E&P Nigeria, a JV of Eland Oil & Gas Ltd. and Starcrest Nigeria Energy Ltd. had successfully bid for a 45% interest in the OML 40 license from SPDC.

These latest awards are not Shell’s first asset sales from its onshore Nigeria portfolio. In January 2010 Shell sold its stakes in OMLs 4, 38, and 41 covering approximately 2,650 sq km in the north western Niger Delta. The buyer was Seplat Petroleum Co. Ltd., a Nigerian company jointly held by two Nigerian firms, Platform Petroleum Ltd. and Shebah Petroleum Development Co. Ltd., along with Maurel et Prom of France.

Shell’s continued sale of onshore assets gives little known indigenous firms a chance at acquiring producing fields.