Adenuga, Dangote, Otedola Bid for Shell’s Oil Blocks

07 Feb 2011

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Mrs. Alison-Madueke, Petroleum Resources Minister


Top Nigerian business moguls – Aliko Dangote, Femi Otedola and Mike Adenuga – are among those in stiff contest to clinch 30 per cent stakes in some oil blocks offered for sale by Shell Petroleum Development and Production Company (SPDC) and its partners.

Sources familiar with the deal hinted Sunday that Adenuga’s Conoil Producing submitted a bid of $650 million each for two Oil Mining Leases (OMLs) 30 and 42, while Dangote Group offered $600 million for Shell’s 30 per cent stake in the OML 30. 

It was also reliably learnt that Otedola’s African Petroleum (AP) submitted a bid of $515 million for the same OML 30, while a consortium of Addax Oryx and Perenco and Oando Plc is bidding for SPDC’s stake in OML 42, which the Nigerian National Petroleum Corporation (NNPC) is also bidding for.

Shell and its partners – Total Exploration and Production Limited and Nigeria Agip Oil Company – recently offered some onshore fields located in the Southern Niger Delta for sale to interested investors. 

The onshore blocks included OMLs 26, 30, 34, 40 and 42, some of which sources said contain reserves of up to 2 billion barrels. 

Also to be sold with the oil blocks are the facilities located in the region where the industry had faced repeated militant attacks.

About 18 consortia were said to have expressed interests in some of the oil fields.

THISDAY had reported that the oil giant selected a few local companies from among about 30 that submitted expressions of interest in the deal. 

To qualify, the bidders, it was learnt, had to prove they had financial and technical means to implement a development plan for the oil fields, some of which had been shut down for years.

In the list of interested bidders were oil industry services group Petrofac, which joined forces with Nigerian gas firm, Seven Energy, to bid for one of the blocks; London-listed oil group Afren Plc, Midwestern Oil, and Gas and Niger Delta Petroleum Resources.

A recent report revealed that Nat Rothschild, scion of the banking dynasty, was backing one group of bidders, while Russian gas giant, Gazprom, was said to be leading a bid with Nigerian resources firm Equinox Group. 

Sources said Shell's partners would have to approve the disposal of any of the assets.

SPDC is the operator of the joint venture in Nigeria between the NNPC (55 per cent), Shell (30 per cent), Total E&P Nigeria Limited (10 per cent), and Nigeria Agip Oil Company (5 per cent).

In 2010, the Nigerian joint venture company operated by the Royal Dutch Shell sold its 30 per cent interest in three oil production licences – OMLs 4, 38 and 41 – which had been shut down since 2008, to a consortium led by the local companies.

The buyer comprised Nigerian companies - Platform Petroleum Limited and Shebah Petroleum Development Company Ltd. and France’s Maurel & Prom.

The area included about 30 wells with a production capacity of about 50,000 barrels of oil equivalent a day of oil and gas, while the licences covered an area of 2,650 square kilometres in the Northwestern Niger Delta, SPDC, a joint venture between the Nigerian National Petroleum Company, Shell (NNPC), Total SA and Eni SpA.

Shell had launched a shake-up of its Nigerian operations by offering oil fields for sale in response to what it described as harsh operating condition.

However, the SPDC Managing Director and Shell Country Chairman, Mr. Mutiu Sunmonu, explained that the divestment programme was entirely focused on onshore fields, and was aimed at encouraging local participation in the upstream petroleum industry.

Tags: Business, Nigeria

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