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Oil news: Shell selling out of Nigeria

22 December 2009

A fascinating theme of the undernews is that so many “black swan” events were accurately forecast by experts — and ignored.  Shell got their money’s worth from this study:  “Peace and Security in the Niger Delta“, Conflict Expert Group of WAC Global Services, December 2003 — About this study, from National Public Radio:

This 2003 report was commissioned by Shell and written by outside consultants. … The consultants warned that, without big changes to how the giant company works with the government and the communities of the delta, a discontent delta population could drive Shell out of the oilfields by 2008.

Their forecast was off by only one year.  And Shell probably wishes they sold in 2008, at a far higher price then they’ll get now.  “Shell plans £3bn sale in Nigeria“, The Times, 20 December 2009 — Excerpt:

Royal Dutch Shell, the oil giant, has launched a shake-up of its controversial operations in Nigeria by offering oilfields valued at up to $5 billion (£3.1 billion) for sale. … It is not selling its offshore blocks, which are less vulnerable and have more generous royalty terms. Most of Shell’s fields are onshore and it is understood that the divestiture programme is focused primarily on those in the western part of the country.

The article explains that their leaving for many reasons, not just the MEND insurgency.

The auction comes as Nigeria prepares to impose harsher terms on foreign operators next month and hand greater control to domestic firms. … A further impetus has been provided by the end of long-term oilfield leases that were granted to Shell and other western rivals such as Exxon Mobil and Chevron. The leases, which have been in force for at least 20 years, were struck under the framework set out in the Petroleum Act of 1960. The Nigerian government is driving a hard bargain on renewal talks.

 Who will buy the assets?  Someone willing to deal with the Nigerian government (unrestricted by western anti-bribery laws) — and aggressively deal with the MEND insurgents.  As in “Chinese in £3bn battle to buy Shell assets in Nigeria“, Times, 21 December 2009.

For more information from the FM site

To read other articles about these things, see the FM reference page on the right side menu bar.  Of esp relevance to this topic:

Afterword

Please share your comments by posting below. Per the FM site’s Comment Policy, please make them brief (250 word max), civil and relevant to this post. Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

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