The federal government has commenced discussions with Anglo-Dutch oil company, Shell Petroleum Development Company, over the planned sale of the company’s stakes in Nigeria’s onshore oil assets.
Shell, operator of Nigeria’s onshore oil and gas joint venture (JV) SPDC, had recently indicated that it would no longer continue to be exposed to the risk of theft and sabotage. The company’s Chief Executive Officer, Mr. Ben van Beurden, said yesterday that its onshore operations in the Nigerian Oil and Gas industry were no longer compatible with its long-term climate strategy, while the additional community issues in the Niger Delta were becoming a huge challenge for the company.
Adding to the tension, the International Energy Agency (IEA) warned that all new oil and gas developments needed to stop immediately for climate targets to be met.
According to him, the balance of risks and rewards associated with their onshore portfolio is no longer compatible with the strategic ambitions. Also they cannot solve community problems in the Niger Delta and the company has started discussions with the government on how to move forward. However, he didn’t say explicitly that Shell wanted to sell the remainder of its oil assets in the Niger Delta, nor did he provide a timetable.
The Minister of State for Petroleum Resources, Timipre Sylva, yesterday in Abuja said that the Federal Government is in consultation with Shell on its divestment plan, although some persons actually feel that Shell should not hurriedly divest.
Shell has been gradually selling onshore assets in Nigeria for more than a decade, as it sought to put aside chronic problems such as pollution caused by ruptured pipelines and the resulting legal battles with local communities.
The issue has become more acute in the past year after Shell pledged to transform itself into a clean energy giant and gradually winds down its oil and gas business to achieve net-zero carbon emissions by 2050. Its green strategy is further complicated by its spill-prone operations in Nigeria, where it has been pumping out oil for half a century.