By Adedapo Adesanya
Royal Dutch Shell has confirmed that it’s already in talks with the Nigerian government for the sale of its stake in onshore oilfields in the country.
This was disclosed by the Chief Executive Officer (CEO) of the Anglo-Dutch company, Mr Ben van Beurden, on Tuesday.
Shell is the operator of Nigeria’s onshore oil and gas joint venture, the Shell Petroleum Development Company of Nigeria (SPDC) and has struggled for years with a number of issues.
Largely, it has been faced with spills in the Niger Delta as a result of pipeline theft and sabotage as well as operational issues. The spills have led to costly repair operations and high-profile lawsuits.
Speaking at the company’s annual general meeting, Mr van Beurden said that Shell can no longer be exposed to the risk of theft and sabotage.
“We cannot solve community problems in the Niger Delta, that’s for the Nigerian government perhaps to solve. We can do our best, but at some point in time, we also have to conclude that this is an exposure that doesn’t fit with our risk appetite anymore,” van Beurden said.
“We’ve drawn that conclusion, and we’re now talking to the Nigerian government on the way forward,” he added.
The Nigerian government also confirmed this development as the Minister of State for Petroleum, Mr Timipre Sylva, stated that both parties were in discussions on the divestment.
The sides are considering transferring the stakes to SPDC or to another local company or selling it to a foreign company, Mr Sylva said in a statement.
In January, Business Post reported that a Dutch court held Shell’s Nigerian subsidiary responsible for multiple oil pipeline leaks in the Niger Delta and ordered it to pay unspecified damages to farmers.
Last year Shell also lost a Nigerian high court case that could lead to $44 million in damages for spills.
Shell’s Nigerian onshore joint venture SPDC has sold about 50 per cent of its oil assets over the past decade.
Shell’s stake in SPDC gave it 156,000 barrels per day of oil equivalent in 2020, of which 66,000 barrels was oil.
