The Shell Petroleum Development Company of Nigeria Limited (SPDC) has sold 30 per cent of its stake in Oil Mining Lease (OML) 17 in the Eastern Niger Delta and associated infrastructure to TNOG Oil and Gas Limited for $533million.
TNOG Oil and Gas is a related company of Heirs Holdings Ltd and Transnational Corporation of Nigeria Plc run by business tycoon Tony Elumelu.
SPDC said in a statement on Friday the completion followed the receipt of all approvals from the relevant authorities of the Federal Government of Nigeria.
“A total of $453million was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.
According to sources, discussion for the sale started in 2018 and had run to hurdles on cash. Exiting the block would cut Shell’s exposure in a region of Nigeria rife with controversy.
The company has sold billions of dollars of Niger Delta assets in the past decade amid local opposition, civil conflict, militant attacks and accusations of causing pollution.
The latest sale would leave Shell to focus on its operations in Nigerian waters where the risks of attacks on infrastructure and theft are relatively low.
Through Shell Nigeria Exploration and Production Company Limited (SNEPCo), the oil major operates deepwater production of oil and gas.
It is the operator of the Bonga field floating production, storage and offloading vessel (FPSO).
It has interests in two Shell-operated deep-water blocks under production sharing contracts (PSC): Bonga (OML-118 – 55 per cent interest) and Bolia/Doro (OML-135 – 55per cent interest).
It also has interests in two non-operated deep-water blocks: Zabazaba, Etan (OPL-245 – 50 per cent interest) operated by Agip under a production sharing agreement; Ehra (OML-133 – 43.75 per cent interest) operated by Esso under a production sharing agreement