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Shell's planned asset sale in Nigeria may take up to a year -CFO

Wed, 30th Apr 2014 14:45

By Simon Falush

LONDON, April 30 (Reuters) - Oil major Shell maytake up to a year to complete a planned sale of assets inNigeria, and the process may be complicated by an election, theoil major's chief financial officer said.

Shell is looking to make $15 billion in disposals worldwidethis year and next, including the sale of its stake in four oilblocks in the Niger Delta, an area that holds a large share ofNigeria's 37 billion barrels of oil reserves.

"We can come to a good commercial agreement," CFO SimonHenry said in a conference call with investors on Wednesday.

"What is slightly more challenging and difficult to predictis how we can get the overall approvals across the whole of thestakeholder environment including the government, because inprevious transactions that has taken ... up to a year."

An election planned for February could have an impact on thesale process, he said, without specifying in what way.

He said the Nigerian assets have attracted strong interestfrom potential buyers.

Shell is divesting 30 percent of the four blocks, along withthe sale of 10 percent from Total and 5 percent fromEni. Analysts have estimated the value of the combined45 percent at around $3 billion.

"We've had over 20 serious bidders mostly in consortium,with a Nigerian operator often with overseas operationalfinancial or operational backing," Henry said.

In the over 70 years that Shell has operated in Africa'slargest oil-producing country, it has faced serious problems onthe Delta with oil theft, environmental damage, politicalprotests and attacks on its facilities.

As part of any deal, the oil major wants minimize itsexposure to further risks there.

"Clearly the terms of the sale aim to establish baselinesagainst which we carry no liability if there are environmentalor other issues after the point of sale. (Whether) that can holdup in the future remains to be seen."

Even after selling off the assets, Shell may still beaffected by its history in the Delta.

"It will always be difficult to detach the Shell name fromsome of the activities in the Delta. We have eyes open on this,but the legal protection will be solid," Henry said.#

"The reputational liability is impossible to divest," headded. (editing by Jane Baird)

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