Shell has commenced negotiations with the intention to sell two of its Nigerian oil licenses in the Niger Delta worth $2 billion.
The Anglo-Dutch oil major is discussing selling oil mining licenses 11 and 17 to Heirs Holding Ltd, a company run by Nigerian businessman, Mr Tony Elumelu, Bloomberg reports.
Bloomberg stated that included in the sale are infrastructure assets such as a natural gas-fired power plant that would be managed by Transnational Corporation of Nigeria Plc, another company run by Elumelu.
It stated that exiting the two blocks would cut Shell’s exposure in the region rife with controversy, adding that Shell 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, and 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.
Bloomberg disclosed that discussions between Shell and Elumelu have been advanced earlier but ran into hurdles as he is yet to secure financing. It quoted an unmanned spokeswoman for Heirs Holdings as saying that she has no knowledge of the talks while Shell declined to comment.
Shell discovered oil in the Niger Delta in the 1950s and became among the biggest producers in the West African nation. Tensions between the company and the local people broke out over the years regarding pollution and Shell’s contribution to civil society.
The growing crisis shot to world attention when in 1995 a prominent protester and Shell critic Ken Saro-Wiwa, a member of the Ogoni ethnic minority, was executed by the Nigerian government along with eight others. In 2011, a 260- page report by the United Nations Environment Programme said the company had not applied its own procedures when operating in the delta and that environmental destruction was worse than previously thought, creating a “tragic legacy.”