Shell’s divestment plan in Nigeria may take longer than expected, with an election in February likely to complicate the sales process and cause up to a year delay, Shell’s CFO has disclosed.
With plans to divest 30 percent of the four blocks it holds in Nigeria’s Niger Delta area – a location that holds about 37 billion barrels Nigeria’s oil reserves – the oil giant expects a revenue of $15 billion in global assets disposals in 2014 and 2015.
“What is slightly more challenging and difficult to predict is how we can get the overall approvals across the whole of the stakeholder environment including the government, because in previous transactions that has taken … up to a year,” Reuters quoted Shell’s Chief Financial Officer (CFO) Simon Henry as saying to investors in a Wednesday conference call.
Henry stated that a February election could tell on the sale process, adding however that potential buyers have shown strong interest in its Nigerian assets, with over 20 “serious bidders” already.
Shell is divesting 30 percent of the four blocks, along with the sale of 10 percent from Total and 5 percent from Eni.
According to analysts’ estimate, Shell’s planned aggregate asset sale would fetch the oil giant up to $3 billion.
Apparently frustrated by years of dealing with oil theft, political protests, environmental damage and several attacks on its facilities, the company has decided to minimize risk and escape from further liabilities.
Shell, Nigeria’s largest operator, however agrees that its history in the communities where it had operated may come back to haunt, but Henry assures of solid legal protection. (VNETURES AFRICA)
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