Shell’s decision to divest from some of its onshore oil assets in Nigeria’s Niger Delta signals a shift in its focus for Africa’s largest oil producer, but it does not mean the oil conglomerate is about to leave the region.
The company since 2010 has sold eight of its licenses in the volatile oil-rich Niger Delta, and the company stated in June 2013 that it was considering the sale of at least four other oil blocks in eastern Niger Delta. The blocks are oil mining licenses (OMLs) 13 and 16 onshore and OML 71 and 72, which are in shallow water.
OML 72 is reported to have proven oil reserves of more than 100 MMbbl, while OML 71 has fewer reserves. OML 13, which has a large amount of gas reserves, is in the Ogoniland area of the Niger Delta, where Shell has been prohibited since 1993 from operating by indigenes of the area. The blocks are in joint ventures, with the Nigerian National Petroleum Corp. (NNPC), which own 55%, with Shell’s share at 30%; Total, 10%; and Eni, 5%.
Shell has, however, experienced pipeline sabotage, several oil spills, and violent disagreements with local communities in Ogoniland. So it is understandable why Shell wants to divest from these oil blocks.
The company said earlier in August 2013 that it was carrying out “a strategic portfolio review” that could lead to selling leases in the eastern Niger Delta. Shell’s outgoing CEO Peter Voser said that while the company would reduce its presence in some parts of the Niger Delta, particularly the east where sabotage is of great concern to the company, it will still invest in others and will not leave onshore operations.
Although Shell is scaling back its onshore and shallow-water operations, it still has interests in deepwater assets. Shell operates the Bonga deepwater oil project, Nigeria’s first deepwater project, which has capacity to produce 200,000 b/d.
It also has Gbaran-Ubie onshore project as well as Bonga North, Northwest, and Bonga Southwest/Aparo in deep water. The fields could give Shell more than 250,000 b/d of oil.
Shell, the largest oil producer in Nigeria, began commercial oil export from Nigeria in 1958. The Shell Petroleum Development Co. (SPDC), a Nigerian Shell subsidiary, has operations in shallow water and onshore the Niger Delta covering about 20,000 sq km (7,722 sq miles). Operations include a network of a little more than 6,000