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Shell assets sale may take one year – CFO

By BusinessNews Staff on May 2, 2014

The Chief Financial Officer, Shell, Mr. Simon Henry, has said that the oil major may not complete its sale of assets in Nigeria until 2015 while expressing fears that the coming general elections may complicate the transactions.

Shell Petroleum Development Company has put up for sale four oil blocks – OML-18, OML- 29, OML-25 and OML-24 and the bidders are Midwestern/Mart/Notore, Sahara Consortium and Dangote/Dansa for OML-18; Vertex/ Seplat/Maurel&Prom/VP Global, Glencore/Neconde, Transcorp, and Aiteo/Taleveras for OML-29.

Others are Lekoil, Crestar, GreenAcres/CCC/Signet Petroleum, NDPR/SAPETRO and Essar for ML-25.

Sahara Consortium, PanOcean/Newcross, Shoreline Aiteo/ Taleveras are also bidding for OML-24.

The company said it hoped to make $15bn in disposals worldwide in 2014 and 2015, the sale of its stake in four oil blocks in the Niger Delta are expected to generate part of the target revenue from asset divestment.

“We can come to a good commercial agreement,” Henry told Reuters in a conference call with investors on Wednesday.

He said, “What is slightly more challenging and difficult to predict is how we can get the overall approvals across the whole of the stakeholder environment including the government, because in previous transactions that has taken … up to a year.”

According to him, an election planned for February can have an impact on the sale process, without specifying in what way.

He said the Nigerian assets had attracted strong interest from potential buyers.

Shell is divesting 30 per cent of the four blocks, along with the sale of 10 per cent from Total and five per cent from Eni. Analysts have estimated the value of the combined 45 per cent at around $3bn.

“We’ve had over 20 serious bidders mostly in consortium, with a Nigerian operator often with overseas operational financial or operational backing,” Henry said.

In the over 70 years that Shell has operated in the county, it has faced serious problems on the Delta with oil theft, environmental damage, political protests and attacks on its facilities.

As part of any deal, the oil major wants minimise its exposure to further risks there.

He said, “Clearly the terms of the sale aim to establish baselines against which we carry no liability if there are environmental or other issues after the point of sale. (Whether) that can hold up in the future remains to be seen.”

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