OML sales: Shell management In dilemma, June deadline unrealistic

The plan by the Anglo-Dutch energy giant, Shell Petroleum Development Company (SPDC) to offer seven oil fields for sale in the Niger Delta might have run into a hitch, Leadership has learnt.

Already, LEADERSHIP gathered that the management of SPDC was miffed with the prices being offered by prospective buyers of the seven onshore and offshore oil mining licenses located in the region.

It was gathered that the sale of the oil mining licences- OMLs 18, 24, 25, 29, 71, 72 and 74, which produces 120,000 barrels of crude oil per day, was being frustrated as prospective buyers offered prices considered below the benchmark and target of the managment of the oil conglomerate.

The oil blocks were floated in joint venture with the Nigerian National Petroleum Corporation, (NNPC), as the state-owned oil corporation owns 55 per cent, Shell 30 per cent, Total 10 per cent and Eni, having the remaining five per cent.

It was gathered that Total and Eni had sold their shares in previous deals.

The oil fields were offered for sale by SPDC due to increasing crude oil theft, pipeline vandalism, oil spills, community unrest and refusal of the Federal Government to renew the operating licenses of some of the fields.

For instance, OML 16 located in Ogoniland of Rivers State, where SPDC is engaged in age-long dispute with the indigenes over unresolved cases of crude oil spills, crude oil theft and sabotage of oil pipelines.

Reliable sources in the company ruled out the possibility of completion of the bidding processes earlier scheduled for June this year. The sources said the management was not in a hurry to dispose the oil fields at “ridiculous prices.”

Specifically, SPDC managment was reportedly uncomfortable with 2.85 million dollars offered by two Nigerian companies- Taleveras and Aiteo for OML 29, which the Anglo-Dutch firm was selling along with the 97 kilometres Nembe Creeks oil pipeline.

It was gathered that in addition to the initial opposition to the acquisition of the oil field by the two companies due to alleged lack of technical capacity, investigation further revealed that the offer was short of the price tag conceived by the oil major.

One of our sources said, “ The bid for the seven oil fields is ongoing but the prices the management is getting from prospective buyers are lower than what it was targetting. The managment had a target price and price tag for each of the OMLs but unfortunately what we are getting is a far cry from our expectations.

“So the bidding processes may not go ahead as quickly as one would have imagine. To this end, it may be difficult to round up the processes by June because the whole processes maybe subjected to a long drawn negotiation.”