Shell to divest from three more oil blocks in Nigeria
Royal Dutch Shell Plc has signed agreements for the divestment of Shell Petroleum Development Company of Nigeria (SPDC) interests in three more onshore Oil Mining Leases (OMLs), which completion is subject to the consent of the Federal Government of Nigeria.
Besides, the company has concluded plans to stake about $35 billion on organic capital investment.
The company, which made this disclosure in its yearly company report for 2014 released on Monday, stated that additional divestments might occur as a result of the company’s strategic review.
She has so far divested from eight OMLs in Nigeria from 2010 to date.
The company said that proceeds of $15 billion from sales of non-strategic assets in 2014, and successfully completing its divestment programme for 2014-2015.
In 2014, the company’s Nigeria subsidiary sold its 30 per cent interest in OML 24 and related onshore facilities for $0.6 billion.
“The completed divestment programme will result in various production and tax effects in 2015”, the report said.
It noted that the company is considering further reductions to capital investment should the evolving market outlook warrant that step, “but are aiming to retain growth potential for the medium term. Asset sales are a key element of our strategy, improving our capital efficiency by focusing our investment on the most attractive growth opportunities”.
The report disclosed that the company took the final investment decision on the Bonga Main Phase three project of which the development is expected to deliver some 40 thousand bpd at peak production through the existing Bonga FPSO.
“We also expect higher levels of downtime in 2015, especially in Upstream and Chemicals, driven by increased maintenance activities. We will continue the initiatives started in 2014, which are expected to improve our North America resource plays and Oil Products businesses. We have new initiatives underway in 2015 that are expected to improve our upstream engine and resource plays outside the Americas. The focus of these initiatives will be on the profitability of our portfolio and growth potential”.
It disclosed that SPDC is undertaking a strategic review of its interests in the eastern Niger Delta and has divested its 30 per cent interest in OML 24.
Dwelling on crude oil theft, the company said: “While the level of crude oil theft activities and sabotage in 2014 was similar to 2013, the impact on production was smaller due to various mitigation measures. During 2014, force majeure related to security issues, sabotage and crude oil theft was only declared once, compared with four times in 2013.
“Our main offshore deep-water activities are carried out by Shell Nigeria Exploration and Production Company (SNEPCO, Shell interest 100 per cent) which has interests in four deep-water blocks. SNEPCO operates OMLs 118 (including the Bonga field, Shell interest 55 per cent) and 135 (Bolia and Doro, Shell interest 55 per cent) and holds a 43.75 per cent interest in OML 133 (Erha) and a 50 per cent interest in oil production lease 245 (Zabazaba, Etan). SNEPCO also has an approximate 43 per cent interest in the Bonga Southwest/Aparo development via its 55 per cent interest in OML 118. Deep-water offshore activities are typically governed through PSCs.
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