Oil fields in Nigeria believed to account for some 50,000 barrels of oil per day, are to be sold by Shell, and while observers believe the firm is selling due to militants incessant attacks on its facilities, a company source said the sale of the fields was part of the company’s regular review of its portfolio and not a decision based on the incessant militant attacks in the region.
“Shell has decided to sell off some of its assets and locations in Delta, Edo and Bayelsa. The sale was meant to encourage local companies to participate more in oil activities and not because of militants,” reporters quoted an anonymous source from Shell as saying.
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, and some reports claim that Shell was selling the fields due to its frustration at the incessant militant attacks on its facilities located in the Niger Delta region.
A recent amnesty program for militants has led to a reduction in violence and production levels are believed to have risen, but Shell is willing to relinquish some of its fields anyways.
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, but militants tap into pipelines, siphon off oil and sell it on a huge scale. Some analysts estimate the illicit industry generates more than $50m a day.
With that kind of money involved, observers say it is hard to see why the militant gangs or their powerful patrons would want peace at all, and Shell, understanding the situation is selling its fields to such local firms as Seplat Petroleum Development Company.
According to sources, the selling off of some Shells assets and locations in the Niger Delta 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.
Nigeria is one of the world’s largest oil exporters and derives more than 90 percent of its foreign exchange earnings from crude, and the militants, who claim to be fighting for a fairer distribution of the country’s oil revenue, have not completely given up the battle for fairer oil revenue distribution until an amnesty program initiated by the federal government is respected.
The amnesty comprised of a deal that meant rebels will exchange weapons for pardon and retraining. Gunmen who accept amnesty would be $433 a month for food and living expenses during the rehabilitation program, which runs from 6 August to 4 October.
By next month, Shells assets are expected to be formally handed over to one of the main buyers, local firm Seplat Petroleum Development Company.