Glencore Xstrata eyes Royal Dutch Shell's troubled Nigerian onshore assets
05 March 2014
Glencore Xstrata, the commodities and mining giant, yesterday said that it is interested in buying the Nigerian oil assets put up for sale by European oil major Royal Dutch Shell.
Following years of militant attacks on its facilities, Shell, Europe's largest oil company had said in December 2009 that it is seeking buyers for its Nigerian onshore oil assets.
Shell's stake is held by its Nigerian subsidiary, Shell Petroleum Development Co, which is the operator of a joint venture in which state-owned NNPC holds a 55-per cent stake, Shell 30 per cent, Total 10 per cent and Eni SpA 5 per cent.
Along with Shell, Total and Eni are also selling their stakes worth a combined $3 billion. Shell is also selling the 97-kms Nembe Creek oil pipeline.
Analysts see Shell and its partners exiting the country mainly due to militant attacks and a number of court cases, which have caused operational headaches for them.
The company has been blamed by locals for the oil spills and environmental damage resulting in attacks on its installations by militants.
Although Shell's assets are worth in the region of nearly $5 billion, these assets will not fetch its real worth since they have been target of militant attacks over the past nine years, and Shell has lost hundreds of millions of dollars in profit since 2006. (See: Nigerian militants target Chevron, Shell oil installations; capture ship)