Shell hits pause on Nigerian asset sale

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© Supplied by Shell’s media gallerWorker in orange overalls checks equipment on FPSO
Shell Engineer carries out regular checks on board the Bonga Floating, Production, Storage and Offloading facility (FPSO). It lies in deep water, Gulf of Guinea, Nigeria, 2015

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Giles Barnard. Shell operations. Supplied by Shell’s media gallery Date; 12/11/2015

Shell has put the sale of its Nigerian assets on hold, pending a court hearing.

A statement from Shell Petroleum Development Co. (SPDC) managing director Osagie Okunbor said the company acted in compliance with the law and court orders.

“SPDC will continue to comply with the Supreme Court’s order to maintain the status quo. We have a strong belief in the merits of our case, which we are vigorously defending,” he said.

Plans to sell SPDC assets are on hold during the appeal process, the company said.

Shell CEO Ben van Beurden signalled the company’s plans in the first half of 2021 when he said it was in talks with the government on an exit. While Shell would continue to hold its deepwater assets and onshore gas, the majority of its SPDC holdings are up for sale.

The Supreme Court ruled last month that Shell would not be able to go ahead with its asset sale while an oil spill case was pending. A community in Bayelsa State has raised a complaint around a leak from the Trans Ramos pipeline.

Shell has reported four leak points on the pipeline in May 2018. As soon as the leaks were reported, it said, SPDC halted production and deployed containment booms and response teams.

Reports suggest just over 1,000 barrels of crude were spilled in the incident. The community has complained about the compensation package offered by SPDC.

The court has scheduled the hearing on the case for October. A lower court has ordered Shell to pay compensation of $1.95 billion into an account.

Local reports have said Tony Elumelu’s Heirs Oil & Gas and ND Western have both bid for the 30% stake held by SPDC in the joint venture with Nigerian National Petroleum Corp. (NNPC).

TotalEnergies and Eni are also selling their stakes, of 10% and 5% respectively. This follows the model of previous sales, such as the disposal of OML 17 to Heirs.

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