Shell Nigeria oil block sales face operator tustle

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ABUJA/WARSAW, June 20 (Reuters) – Nigeria’s state-oil company said on Monday it would take over as the operator of oil blocks being sold by Shell (RDSa.L), but one bidder nearing a deal expected one of its partners to be managing production.


Shell is on the brink of agreeing sales for its share in four Nigerian oil blocks it operates, some of which have
attracted bids of over $1 billion, but any transaction needs the approval of state-oil firm and majority shareholder NNPC.


Poland’s Kulczk Oil Ventures KOVP.WA, which is part of a consortium that has a deal for one block, understood that one of its bidding partners would take over from Shell as the operator of the fields, a spokesman for the company said on Monday.


Other bidders were not available for comment and a Shell spokesman declined to comment.


“The operatorship is not for sale. This was made clear in the beginning and any buyer who says they did not know is
lying,” a spokesman for NNPC told Reuters on Monday.


“NPDC, a subsidiary of NNPC, will operate the blocks. NPDC has a lot of experience. It currently produces over 100,000 barrels per day as operator of other blocks,” he added.


Shell, Total (TOTF.PA) and Eni (ENI.MI) are selling their combined 45 percent of the blocks OML 30, 34, 40 and 42, while NNPC holds the remaining 55 percent.


Deals for two of these blocks have been agreed while the remaining assets are all but sewn up, sources said.


A consortium of Nigeria’s Nestoil, Aries, VP Global and Kulczk Oil Ventures, which is owned by Polish billionaire Jan
Kulczyk, has agreed to pay around $600 million for a 45 percent stake in the production license of OML 42, sources said.


Elcrest Exploration and Production, the joint venture between Africa-focused firms Eland and Starcrest, said it had
agreed to buy the 45 percent interest in block OML 40.


A consortium of Niger Delta EP and Petrolin are strong favourites to pick up OML 34 and Conoil, a company owned by
Nigerian billionaire Mike Adenuga, is close to completing a deal for the final block, OML 30. [ID:nLDE74I1VS]


Shell has said it views Nigeria as a key part of its business and the sale of these assets, which make up a small
portion of its operations in the country, is not the beginning of a wider departure from Africa’s most populous nation.


(Writing by Joe Brock; editing by William Hardy)


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