Shell may sell some assets in Nigeria to escape from militant attacks

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Shell plans to sell off some of its onshore oil fields in southern Nigeria, a company source said Friday, with the facilities located in a region where the industry has faced repeated militant attacks.

The fields are believed to account for some 50,000 barrels of oil per day. The company declined to give the price of the sale of the fields.

“Shell has decided to sell off some of its assets and locations in Delta, Edo and Bayelsa,” the company source said on condition of anonymity, referring to states in the oil-rich Niger Delta region.

The source said the sale of the fields was part of the company’s regular review of its portfolio and the decision was not linked to militant attacks in the region.

He said the sale was also meant “to encourage local companies to participate more in oil activities.”

“The selling off of some assets and locations in the region does not translate to pulling out of the area. The Niger Delta is our operational base and the areas from where we are divesting are relatively peaceful,” he said.

One of the main buyers is local firm Seplat Petroleum Development Company, he said, and the assets are expected to be formally handed over to the new owners next month.

Shell, Nigeria’s biggest operator in the oil sector, produced an average of 629,000 barrels per day last year compared to 850,000 barrels in 2008.

Militant attacks on pipelines and other oil installations in the Niger Delta caused total oil output to fall to around a million barrels per day compared to 2.6 million barrels at peak production level.

But a recent amnesty programme for militants has led to a reduction in violence and production levels are believed to have risen.

The militants say they are fighting for a fairer distribution of the country’s oil revenue.

Nigeria is one of the world’s largest oil exporters and derives more than 90 percent of its foreign exchange earnings from crude.

Source: AFP