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Shell in Talks to Sell $2b Worth of Nigeria Assets

Shell in Talks to Sell $2b Worth of Nigeria AssetsShell in Talks to Sell $2b Worth of Nigeria Assets

Royal Dutch Shell Plc is in talks to sell two Nigerian oil licenses in an area that’s at the heart of environmental and human rights controversies for $2 billion, according to people familiar with the plan. The Anglo-Dutch oil major is discussing selling oil mining licenses 11 and 17 to Heirs Holding Ltd., a company run by Nigerian tycoon Tony Elumelu, the people said, World Oil reported.

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, they said. Exiting the two blocks 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.

Discussions between Shell and Elumelu have been advanced at times and run into hurdles at others as he is yet to secure financing, the people said.

No deal has been reached and the talks could still fall apart, they added. A spokeswoman for Heirs Holdings said she has no knowledge of the talks. Shell declined to comment.

Shell discovered oil in the Niger Delta in the 1950s and became one of 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 Ogoni ethnic minority, was executed by the Nigerian government along with eight others.

Shell’s Niger Delta operations have faced outside scrutiny. In 2011, a 260-page report by the United Nations Environment Program 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”.

 

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