22 April 201, London — Royal Dutch Shell is working on selling out of its onshore assets in Gabon, according to two sources familiar with the matter, seeking to refocus its African presence.
Bids are due in June for the fields, which one source estimated could be worth around $700 million. However the second person said that price indications were currently below Shell’s expectations and that no sale may occur.
“Shell continuously evaluates opportunities for our global portfolio in line with our business strategy,” a company spokesman said on Thursday. The oil major has been operating in the west African country for more than 50 years.
Its holdings include the Rabi Kounga and Gamba fields. Shell has announced plans to sell at least $30 billion worth of assets over the next three years, in order to finance its $52 billion BG acquisition and focus its portfolio on deep water oil production and the rapidly-expanding liquefied natural gas market.
The sharp drop in oil prices over the past two years and continued uncertainty over the price recovery have nevertheless crimped the market for oil production assets and limited acquisitions in the sector. It has also crimped the economies of many oil-dependent African countries.
OPEC sources have said Gabon wants to rejoin it after more than two decades, just as the oil exporters’ group is taking the first steps in years to prop up prices.
Gabon has been seeking to diversify its economy away from oil, focusing on attracting tourists and investors in sectors such as mining. Shell has indicated that most sale processes for “upstream” oil and gas production assets would likely take place in 2017 and 2018.
*Freya Berry and Ron Bousso; Editing by Lawrence White/Ruth Pitchford – Reuters