Shell, has reportedly initiated negotiations with local oil producers for selling two of its Nigerian oil licences in the Niger Delta, collectively worth $2 billion.
The Anglo-Dutch petrochemical giant is in talks about selling its oil mining licenses 11 and 17, reports confirmed. Sources close to the matter revealed that the deal would involve selling essential infrastructure assets as well, including a natural gas-fired power plant that will be managed by Nigerian economist, Tony Elumelu’s company, Transactional Corporation of Nigeria PLC (Transcorp).
They further disclosed that initially, talks between Shell and the local buyers were at an advanced stage, but faced complications due to lack of financing.
As per records, the oil mining licence 17 falls within oil corporation NNPC/Shell joint venture and includes 15 oil and gas fields, out of which six are actively producing oil at the moment. Oil mining licence 11 is one of the biggest blocks in southeast part of Niger Delta and has 33 oil and gas fields, eight of which were producing as of 2017.
The Federal Government had supposedly divided the block into three portions in April, offering one to Shell after it confirmed renewal of its production licence.
Reports unveiled that incidents such as local oppositions, militant activities, civil conflict, and allegations of environmental pollution, had shrouded the company in controversies and exiting the two oil blocks may reduce Shell’s exposure in Nigeria.
Post the sale, Shell will be able to focus on its deepwater operations where the frequency of theft and threat of attacks on infrastructure are quite low.
Shell’s origin in Nigeria dates to 1936 when Shell D’Arcy was founded, the group’s first company in the nation. In 1938, it was granted an exploration licence and in 1950, after discovering oil in the region, Shell became one of the biggest producers in West Africa.
Meanwhile, European states warned the United Nations that more than 800,000 people are cut off from aid and may be starving in northeast Nigeria, contradicting government assertions that a crisis has abated and rebuking the world body for failing to secure access.
Nigeria’s government has said this year that an emergency in the northeast caused by a decade-long conflict with Islamist fighters was easing, and efforts should shift from humanitarian relief to longer term development aid.
But in a letter to directors of emergency programmes at U.N. and other aid agencies, the EU, Britain, France and Germany said the United Nations was failing to press home the urgency of a disaster which had put children at risk of starvation.
“We are very concerned about urgent and unmet humanitarian and protection needs in North-East Nigeria,” they wrote.
The U.N. mission in Nigeria must push the government to allow “the rapid, unimpeded and unfettered humanitarian access to people in need of life-saving assistance.”
The letter said 823,000 people were in areas inaccessible to aid in Nigeria’s Borno state, the area worst affected by the decade-long insurgency by the Boko Haram Islamist group and its offshoot, Islamic State in West Africa. Children who have left the area over the past 11 months had shown critical levels of malnutrition, said the letter, reviewed by Reuters.
The European countries, all major donors to the relief effort, called for “stronger, strategic and consistent advocacy with the Government of Nigeria to uphold their responsibility to protect and assist their citizens.” The letter was sent to directors of emergency programmes through a body called the U.N. Inter-Agency Standing Committee (IASC).
The IASC referred queries about the letter to the U.N. office in Nigeria. A spokeswoman there said on Monday she was preparing a response, but she had not provided one by Tuesday evening. Representatives of the Nigerian presidency did not respond to a request for comment.
Nigeria’s call for a change in emphasis in the northeast away from emergency aid and towards long-term development assistance fits a narrative long expressed by President Muhammadu Buhari that the conflict is waning.
Buhari won election in 2015 on a vow to defeat Boko Haram and restore stability and security to the northeast, and is now seeking a second-term campaigning on his government’s success in achieving it.
As part of that effort to portray the northeast as safer, thousands of people have been ordered back to dangerous areas that aid agencies say are inaccessible, and where the condition of hundreds of thousands of people is unknown. A person familiar with the drafting of the letter said the countries that signed it were trying to express “a lack of confidence in U.N. leadership in Nigeria.”
“People are nearing starvation and there is little help for those being returned to inaccessible areas. And the humanitarian situation is escalating not getting better.”