4 Indigenous firms submit bids for Shell Oil fields in Nigeria: Report

*Seplat Energy Plc, Sahara Group Limited, Heirs Oil and Gas Limited, and ND Western Limited have submitted the non-binding offers to Shell Oil January 2022, says report

Isola Moses | ConsumerConnect

In a move to complete an exit process the oil multinational started over a decade ago,  Shell’s sale of a multibillion-Dollar stake in a Joint Venture (JV) that operates oil fields in Nigeria has attracted bids from four local companies.

ConsumerConnect gathered that Seplat Energy Plc, Sahara Group Limited, Heirs Oil and Gas Limited, and ND Western Limited had submitted the non-binding offers January 2022.

Shell Plc’s sale of a multibillion-dollar stake in a joint venture that operates oil fields in the country has attracted bids from the four indigenous companies, according to people familiar with the negotiations.

The transnational oil company is reportedly seeking to complete an exit process it began over 10 years by selling its remaining onshore and shallow-water assets, Bloomberg report said.

Shell’s 30 percent operating interest could fetch as much as $4 billion, according to one of the people.

Another person said Shell has yet to disclose to buyers the scale of potential future costs related to litigation or decommissioning and abandoning oil wells, which could bring down the sale price significantly, report stated.

In August, energy consultant Wood Mackenzie Limited valued the stake at $2.3 billion, assuming a long-term oil price of $50 a barrel.

Brent crude, the international benchmark, is currently trading about $93 af of Friday, February 4, 2022.

As Shell is looking to complete an exit process started in the country, it was learnt the London-based oil major has been pumping crude in Nigeria since shortly before it secured Independence in 1960.

Reports have said the lengthy association has resulted in an accumulation of accusations, lawsuits, and reputational damage as numerous local communities have been afflicted by oil spills and other forms of pollution.

Investors are also keen for Shell to transition to cleaner forms of energy, report said.

However, even after a sale of the assets, Shell Oil will retain a significant presence in Africa’s biggest crude producer as the owner of export terminals and deep-water projects, according to report.

Shell is currently evaluating the non-binding bids to see which parties to take to the next round, one of the people said.

While deliberations are ongoing, no final agreements have been reached and Shell could also decide to retain the asset, sources were quoted as saying.

Shell, Seplat, Sahara, Heirs, and ND Western declined to comment on the development when contacted by Bloomberg News.

It is as well noted that state-owned Nigerian National Petroleum Company (NNPC) Limited, TotalEnergies SE and Eni SpA own the rest of the joint venture, with 55%, 10% and 5% stakes respectively.

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