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UPDATE 2-Shell sells some Nigerian onshore oil fields

Wed, 27th Aug 2014 16:40

* Oil majors increasingly moving out of onshore Nigeria

* Niger Delta plagued by insecurity, oil theft, spills

* Govt keen to encourage local ownership of oil assets (Adds GT Bank comment in paragraph 7)

By Ron Bousso and Tim Cocks

LONDON/LAGOS, Aug 27 (Reuters) - Royal Dutch Shell said it had reached deals on some of the four Nigerian oilfields it has offered for sale as the oil major pushes aheadwith divesting global assets to cut costs.

Shell last year put up for sale its 30 percent shares infour oil blocks in the Niger Delta - Oil Mining Licences (OML)18, 24, 25, 29 - as well as a major pipeline, the Nembe CreekTrunk Line.

"We have signed sales and purchase agreements for some ofthe oil mining leases, but not all that we are seeking todivest," a Shell spokesman said on Wednesday.

In several rounds of divestments, Shell has been moving awayfrom Nigerian onshore oil, which is plagued by industrial scaleoil theft, security problems and oil spills, the latter havingbecome a growing legal liability for major oil companies.

Politics have also played a role. The government is keen toput indigenous operators in charge of onshore oil extraction,leaving the international majors to manage more difficult andcapital-intensive deep-water projects offshore.

Firms have also been hampered by uncertainty over theparticulars of an oil bill designed to overhaul the industry,which has been stuck in parliament for two years and looksunlikely to be passed before February 2015 elections.

Guaranty Trust Bank is among the banksfinancing the deals. The CEO of the bank, Segun Agbaje, told aninvestor conference call on Wednesday that two of them willclose within the next two months.

Other companies including Total, Eni, andChevron have also looked to dispose of assets.ConocoPhillips sealed a $1.5 billion deal with Nigeria'sOando last month.

No details were available on the value of the deals Shellsigned, nor when the full process would be completed. Oando'sdeal with ConocoPhillips took more than 18 months to sign off.

France's Total and Italy's Eni are also set to raise revenuefrom the sale of 10 percent and 5 percent stakes in the assets.Shell Petroleum Development Corporation (SPDC) is a Shell-runjoint venture 55 percent-owned by the Nigerian NationalPetroleum Corporation, with the other 45 percent split betweenShell, Total and Eni.

LOCAL BUYERS

The Financial Times on Wednesday reported that Shell wasclose to selling the assets for about $5 billion to domesticbuyers, citing banking sources.

In March, Reuters reported that Nigerian firms Taleveras andAiteo had made the highest bid of $2.85 billion for OML 29, thebiggest of the four oil fields.

Two market sources said Aiteo had won that bid, although itwas not clear whether the two companies were still working aspartners. One banking source said Aiteo may have gone in withoutTaleveras.

A senior Taleveras official said the company could notcomment until Shell makes an announcement.

A senior Nigerian oil executive said a consortium headed byPan Ocean Oil Corporation had bid for OML 24 at a price of about$1 billion.

He said it worked out to about $10 per barrel of crude inthe ground, similar to Oando's deal, and that the price was"high, especially considering the issues with the trunkline".

The banking source said Crestar had clinched OML 25. Itwasn't clear who had got OML 18, the sources said. The FTreported it went to Eroton, a consortium of Midwest Oil and Gas and Mart Resources.

Cement and food tycoon Aliko Dangote, Africa's richest manwith a fortune of some $20 billion, was among the bidders on theblocks, although he didn't win anything, the sources said.

There is widespread speculation in the local market thatShell is also seeking to offload OMLs 11 and 17 in Ogoniland,where it has faced criticism from the United Nations EnvironmentProgramme and human rights groups for failure to adequatelyclean up decades of oil spills.

A Shell spokesman declined to comment on this.

Shell, along with many other oil majors, is undergoing abroad process of asset sales across the world in an effort tocut costs and boost profits. (editing by Jane Baird, editing by David Evans)

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