Oil giant Royal Dutch Shell is set to sell oilfields worth up to $5bn (€3.5bn) in Nigeria as part of a shake up of operations in the country, it was reported today.
The sale comes as the Nigerian Government prepares to impose harsher terms on foreign operators from next month in a bid to hand greater control to domestic companies, according to the Sunday Times newspaper.
The oilfields in question, which are thought to have been valued at up to $5bn, are mainly in the western part of the country, and include fields that are producing oil, as well as development ones and ones that have been shutdown due to violence.
It is understood that the group is not planning to sell its offshore fields, which are less vulnerable and have more generous royalty terms.
Sinopec, a state-owned Chinese oil group, is reported to have requested information on the fields, while Nigeria’s largest independent oil group Oando and London-listed Afren are also thought to be interested.
The move to reduce its operations in Nigeria represents a significant policy shift for Shell, which is the largest western oil firm in the country, where it has had operations for 70 years.
However, it has encountered significant problems there, including illegal tapping, piracy, the sabotage of pipelines and a campaign of violence against foreign workers.
As a result, it has invested billions of pounds in other locations in recent years to reduce its dependence on Nigeria.
No-one from Shell could be contacted to comment on the report.
Meanwhile, Reuters reported that a group led by Shell had signed a deal to develop Iraq’s giant Majnoon oilfield.
The group, which includes Malaysia’s state-run Petronas, won the rights to develop the field, which is near Iraq’s southern oil hub of Basra, in an auction earlier this month.
The initial agreement was signed by Abdul-Mahdy al-Ameedi, the deputy director of the Iraqi Oil Ministry’s licensing office, and Mounir Bouaziz, a vice president of Shell Gas and Power, in Baghdad today.
The deal now needs to be approved by the Iraqi cabinet.
Shell has said it will invest “tens of billions of dollars” in the oilfield during the life of the 20-year deal.
Shell is currently in the middle of a restructuring programme that will have led to around 5,000 staff leaving the company by the end of this year.
It has also reduced operating costs by $1bn (€690m) in the first nine months of the year.
But despite this it reported a 73% slide in profits during the three months to the end of September to $2.99bn ($2.08bn) as a result of weaker oil prices and the ailing global economy.
Chief executive Peter Voser warned that while there were indications that energy demand and pricing were picking up, the outlook remained uncertain and the company had ruled out a quick recovery in trading conditions.