Nigeria’s state oil company and a local consortium are set to take over an oil block operated by Shell, the latest such move involving the Anglo-Dutch petroleum giant, officials have announced.
The deal for oil mining lease 34 was announced by the state oil firm NNPC late Tuesday. Shell however said Wednesday the formal transfer was not yet complete, adding the company would only provide details after it was done.
It comes with Shell, historically the largest producer in Nigeria, seeking to sell off its share in a handful of onshore blocks. Analysts have said Shell appears willing to shift more of its focus offshore in Africa’s largest oil producer, where the risks of sabotage and militant attacks are lower.
Nigeria has also been seeking to boost local firms’ involvement in the country’s oil industry. The block had been owned by a joint venture, with state oil firm NNPC holding 55 percent, Shell a controlling 30 percent, French firm Total 10 percent and Italy’s Agip, a unit of ENI, five percent.
NNPC is now to retain its 55 percent and local consortium ND Western will hold 45 percent. The amount of the deal was not provided.
The state oil firm announced in a statement “the taking over of oil mining lease 34 by the Nigerian National Petroleum Corporation (NNPC) and ND Western from Shell, Total and Agip as part of measures to grow the in-country upstream capacity of the petroleum industry.”
A 2009 amnesty deal has led to a sharp decline in unrest in the oil-producing Niger Delta region, though sporadic incidents still occur. Sabotage and pipeline damage linked to oil theft continue to be a major problem.