Shell’s divestment plan in Nigeria may take longer than expected, with an election in February likely to complicate the sales process and cause delay of up to a year.
With plans to divest 30 per cent of the four blocks it holds in Nigeria’s Niger Delta area – a location that holds about 37 billion barrels Nigeria’s oil reserves – the oil giant expects a revenue of US$15bn in global assets disposals in 2014 and 2015.
“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,” Reuters quoted Simon Henry, Shell CFO, as saying.
He said that a February election could tell on the sale process, adding however that potential buyers have shown strong interest in its Nigerian assets, with over 20 “serious bidders” already. 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.
In the over 70 years that Shell has operated in Africa’s largest oil-producing country, it has faced serious problems on the Delta with oil theft, environmental damage, political protests and attacks on its facilities.