Shell Petroleum Development Co. of Nigeria Ltd. (SPDC) has completed its assignment of 30% interest in oil mining lease 18 (OML 18) in the Eastern Niger Delta to Eroton Exploration & Production Co. Ltd. for $737 million.
OML 18 covers 1,035 sq km and includes Alakiri, Cawthorne Channel, Krakama, and Buguma Creek fields and related facilities. The fields produced 14,000 boe/d during 2014.
The divested assets include flow stations with associated gas systems as well as oil and gas pipelines within the OML.
Total E&P Nigeria Ltd. and Nigerian Agip Oil Co. Ltd. also have assigned their interests of 10% and 5%, respectively, in the lease, ultimately giving Eroton 45% interest.
All approvals have been received from the relevant authorities of Nigeria’s federal government.
SPDC operates a joint venture alongside Nigerian National Petroleum Corp. with 55%, SPDC 30%, Total 10%, and Nigerian Agip Oil 5%.
SPDC says the divestment is part of its strategic review of its onshore portfolio and is in line with the Nigeria’s aim of developing companies in the country’s upstream oil and gas business.
The company has shed interests in Nigerian OMLs on several other occasions. During 2011-12, SPDC respectively assigned 30% interests in OML 26 to FHN26 Ltd. and OML 42 to Neconde Energy Ltd. (OGJ Online, Dec. 5, 2011); OML 40 to Elcrest Exploration & Production Nigeria Ltd. (OGJ Online, Sept. 4, 2012); OML 34 to ND Western Ltd. (OGJ Online, Sept. 7, 2012); and OML 30 to Shoreline Natural Resources Ltd. (OGJ Online, Nov. 12, 2012).
Proceeds from those sales along with the sale of OML 18 total about $2 billion.
Shell, whose operations in Nigeria date back more than 50 years, says it remains committed to keeping a long-term presence in the country both onshore and offshore.
