Royal Dutch Shell is reportedly seeking buyers for 10 of its Nigerian onshore oil production assets following years of militant attacks on its facilities that have significantly affected profits.
The oil fields have a combined value of between between $4 billion (Ôé¼2.7 billion) and $5 billion (Ôé¼3.4 billion), with proven oil reserves of about 100 million barrels.
Shell is looking to sell off the blocks in the first half of next year. The company has been NigeriaÔÇÖs biggest foreign oil operator by production for decades.
Nigeria has Africa's biggest proven oil and natural gas reserves.
It is estimated that since 1996, Shell has lost hundreds of millions of dollars in profit due to the attacks.
Shell often gets blamed by local communities for the oil spills and environmental damage resulting from attacks on its pipelines and facilities; furthermore, due to the security risks, Shell often has to wait weeks before it can go into remote areas to repair damaged facilities.
It is as yet unclear whether Shell is looking to leave NigeriaÔÇÖs onshore area altogether. It is also not known how the sales will affect ShellÔÇÖs joint venture with NigeriaÔÇÖs state-owned oil company, Shell Petroleum Development Co. (SPDC), through which the Dutch firm conducts its operations in the country.
Last year, SPDC produced an average 850,000 barrels of oil equivalent a day last year, well below the capacity of one million barrels.
The move will not, however, affect ShellÔÇÖs 26 per cent stake in Nigeria Liquefied Natural Gas Ltd., which ships gas to Europe and the US. Neither is the company planning to sell any of its offshore interests, which are less vulnerable to rebel attacks and piracy.
The Nigerian government is currently looking to toughen the financial terms it offers foreign operators, which analysts say could hurt investment in the country. It is a move designed to give more control of NigeriaÔÇÖs oil industry to domestic operators.
Sinopec and China National Offshore Oil Corporation (CNOOC) are understood to have expressed interest in the fields.
Chinese state-run oil companies are keen to boost their production presence in the country through purchases of onshore oil fields. Indian companies are also thought to be interested, as well as UK-based independent oil explorers.
Shell is currently focusing on major developments such as the Pearl gas-to-liquids project in Qatar and the Perdido deepwater well in the Gulf of Mexico.
Shell is said to be at the stage of sending out technical data on the Nigerian oil fields and inviting proposals.
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