Shell to sell 4 more oil blocks, pipelines

Shell logo10 October 2013, Lagos  – Shell Petroleum Development Company, SPDC, has announced plans to sell off its 97-kilometer, 150,000 barrels of oil per day Nembe Creek Trunk Line in the Niger Delta region.

The company, along with its joint venture partner, is also planning to sell off four more oil blocks — Oil licenses 18, 24, 25 and 29.

This was even as the company, yesterday, shut the Trans Niger Pipeline, TNP, following reports of new leaks, barely 10 days after the line was repaired from crude oil theft incidents, deferring about 150,000 barrels of oil per day.

The company said the latest leaks were reported at B-Dere, Nonwa–Tai, and Bodo West all in Ogoni land, adding that it shut the line as a precautionary measure after receiving reports of the incidents and has also mobilised a spill response team.

It added that a joint investigation visit be conducted as soon as possible to determine the cause and impact of the spills.

The Nembe Creek Trunk Line, a key oil transport channel, which Shell has repeatedly shut this year after attacks by oil thieves and the four oil blocks feed the Bonny terminal, Nigeria’s oldest export facility, commissioned by Shell in 1961.

Sources close to the company, said the joint venture, which also includes Total and Eni, has sent out offer documents for the oil blocks.

When contacted, spokesperson for Shell Nigeria, Mr. Precious Okolobo, said, “Nigeria remains an important part of Shell’s portfolio, where we will continue to have a significant onshore presence in oil and gas, and which has clear growth potential, particularly in deepwater and onshore gas.

“Shell has a history of over 50 years in Nigeria and remains committed to the country and to supporting the Government of Nigeria in their plans for the oil and gas sector.”

“In June 2013 we announced a strategic review of our operations in the Eastern Niger Delta, which we said could result in the divestment of some of our interests there. The review is ongoing and therefore we are not in a position to confirm which, if any, blocks may be put up for sale.”

According to Wood Mackenzie, the four blocks produced 70,000 barrels of oil and natural gas liquids last year, roughly 10 per cent of the joint venture’s total production and eight per cent of Shell’s total production in Nigeria.

Wood Mackenzie further stated that the planned sale will alert a host of domestic Nigerian companies that have spent more than $5bn in recent years acquiring onshore fields from the majors.

According to Wood Mackenzie, Seplat and Shoreline Natural Resources, which have both purchased oil blocks from Shell, have raised production by investing heavily in the blocks.The Shell joint venture has sold a series of blocks since 2010 for more than $2 billion, but the latest sales will represent the largest so far in terms of production.

The Nembe Creek trunkline was originally constructed to collect crude oil from 14 oil pumping stations across the Nembe Creek, Krakama, Awoba, Ekulama and San Bartholomew oil fields and transport it to the Cawthorne Channel field and Shell Petroleum Development Company (SPDC) of Nigeria’s Bonny Export Terminal for dehydration and export.Shell in 2010, SPDC invested $1.1 billion to replace its Nembe Creek pipeline, but leaks and fires related to crude-oil theft still forced the company to close the pipeline several times between December 2011 and May 2012.

SPDC shut the pipeline in April to remove connections used to siphon off oil after incidences of theft rose to unprecedented levels.

– Vanguard

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