Bloomberg News

Nigeria’s State-Run NNPC to Operate Shell Fields Up for Sale

June 20, 2011

(Updates with NNPC comment in third paragraph.)

June 20 (Bloomberg) -- Nigeria said it will take over operator rights at each of the four licenses in which Royal Dutch Shell Plc is selling its interests.

State-owned Nigerian National Petroleum Corp. will operate the licenses, said Levi Ajuonuma, a company spokesman, through its Nigerian Petroleum Development Co. unit.

“The operatorship is not part of the sale,” Ajuonuma said today by phone from Abuja, the capital. “That’s why we put the caveat emptor to warn those who think they will come in and be the operators.”

SacOil Holdings Ltd., the South African explorer that failed to win a joint bid for Shell’s interest in the OML 42 license, said last week that Nigeria’s decision to take over the operatorships added an extra risk for investors.

“Clearly that raises issues for the buyers because you are not in control of the asset,” SacOil’s Chief Executive Officer Robin Vela said June 17 in an interview in London. “It adds another layer of risk to the transaction.”

Kulczyk Oil Ventures Inc. said last month it won the bid for OML 42 with a local partner and will acquire the 45 percent interest held jointly by Shell, Total SA and a unit of Eni SpA. NNPC holds the remaining 55 percent.

In addition to OML 42, Shell is also selling its interests in the OML 30, 34 and 40 licenses in which it holds a 30 percent stake and NNPC owns 55 percent. Total SA has a 10 percent stake and Eni SpA holds 5 percent.

Nigeria is Africa’s biggest oil producer and the fifth- biggest source of U.S. oil imports.

--With assistance from Eduard Gismatullin in London. Editors: Stephen Cunningham, Raj Rajendran.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


Too Cool for Crisis Management
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus