On 31 August 2012, Royal Dutch Shell’s subsidiary Shell Petroleum Development Company of Nigeria (SPDC) sold 30% interest in oil mining lease (OML) 40 to Elcrest Exploration and Production Nigeria. OML is located in the Niger Delta. SPDC has received approximately US$102 million as total cash proceeds through this deal.
This OML divestment is considered to be a part of SPDC’s plan to refocus on its onshore interests in Nigeria and is similar to the objective of Federal Government of Nigeria to expand the firms in the upstream gas and oil businesses in the country. Since 2010, SPDC has completed six onshore leases, including this lease, in Nigeria.
According to the Country Chairman in Nigeria, Mutiu Sunmonu, these divestments represent another step in the company’s plan to re-focus on its portfolio. SPDC is well-positioned for growth opportunities and investment in all regions, which include domestic gas that will be supplied with the help of partners, government, and Nigerian people.
Shell has been operating for over 50 years in Nigeria and continues to keep an enduring presence both offshore and onshore. The company is producing the required gas and oil to fuel the industrial and economic growth, which creates employment for Nigerians and boosts the country’s economy through SPDC and other firms.
Elcrest is a main consortium that includes Eland Oil and Gas and Starcrest Nigeria Energy. OML 40 encloses nearly 498 sq. km area and comprises the Abiala and Adagbassa Creek and Opuama fields and its associated facilities. Since 2006, operations remained closed due to militant activity.
Additionally, Nigerian Agip Oil Company and Total E&P Nigeria have allotted their interests in this lease. Relevant authorities of the Nigerian National Petroleum and Federal Government of Nigeria have approved this move.