Nigeria opposes Shell's plans to divest holdings

The Nigerian government said yesterday that Shell cannot sell the oilfields it owns jointly with the Nigerian National Petroleum Corporation (NNPC) after the Anglo-Dutch oil company said last week that it was seeking buyers for its stake worth $4-5 billion. (See: Shell to divest Nigerian assets worth $5-billion).

Nigeria's minister of petroleum, Dr. Rilwanu Lukman, told Bloomberg yesterday that the company would need government's approval to sell the oilfields. ''It's not theirs to sell. They're holding concessions given them by the government.''

Lukman said that Shell would require government's approval for selling its Nigerian onshore oil-production assets, and added that his ministry has received no such request from Shell.

Last week, Europe's largest oil company, Shell was seeking buyers for 10 of its Nigerian onshore oil-production assets holding proven oil reserves of about 100 million barrels with a market value of $4-5 billion, following years of militant attacks on its facilities.

With 2008 revenue of $458.4 billion, Shell is the oldest international oil and gas company operating in Nigeria, where its Nigerian subsidiary, Shell Petroleum Development Co., is the operator of a joint venture in which state-owned NNPC holds a 55 per cent stake, Shell with 30 per cent, Total with 10 per cent and Eni SpA with 5 per cent.

Shell's plan to leave the country were mainly due to the militant attacks, who are seeking a greater share of Nigeria's oil wealth as well as public litigations, which cause operational headaches and loss of hundreds of millions of dollars in profit since 2006 for the oil giant. (See: Royal Dutch Shell settles Nigerian human-rights abuse case for $15.5 million /: Nigerian militants target Chevron, Shell oil installations; capture ship)