Shell Petroleum Development Company (SPDC) has completed the sale of its interest in oil mining lease (OML) 29, the Nembe Creek Trunk Line (NCTL) and related facilities in the Eastern Niger Delta. The sale is part of the strategic review of its onshore portfolio, in line with the Federal Government (FG) of Nigeria’s policy of developing and upgrading Nigerian companies in the nation’s upstream oil and gas business.
The deal, which is put at $1.7 billion, is sealed with Aiteo Eastern E&P Company Limited, thereby increasing the participation of the indigenous companies in the upstream sub-sector of the oil and gas industry. OML 29 is considered the juiciest of the blocks that the company has put on offer, according to industry analysts.
This exercise is coming barely five days after it completed the sales of its 30 percent interest in OML18 and related facilities in the Eastern Niger Delta, to Eroton Exploration and Production Company Limited, a transaction that was put at $737 million. SPDC, the Nigeria’s biggest crude oil producer’s sale of these assets is part of its plans to complete the sale of four oil blocks in Eastern Niger Delta targeting $15 billion from assets sales between 2014 and 2015. OML 29 covers an area of 983 square kilometres and includes the Nembe, Santa Barbara and Okoroba fields and related facilities.
The NCTL is 100 kilometres long and has a capacity of 600 thousand barrels per day. It was commissioned in 2010 and evacuates crude to the Bonny Crude Oil Terminal (BCOT). BCOT is not part of the transaction and will remain and operated by the Shell Joint Venture. The divested infrastructure includes flow-stations with associated gas infrastructure including oil and gas pipelines within the OML. It produces around 43,000 barrels of oil equivalent per day in 2014.
Joseph Dawha, group managing director of the Nigerian National Petroleum Corporation (NNPC), while speaking at a brief ceremony to mark the signing of a Memorandum of Understanding (MoU) between SPDC and Aiteo for the transfer of Shell’s equity in OML 29, described the transaction as a milestone in the quest of the Federal Government to develop the capacity of Nigerians and Nigerian companies to play leading roles in every sector of the oil and gas industry as encapsulated in the Nigerian Content Development Act.
