Four indigenous oil and gas companies have expressed interest in acquiring Shell Petroleum Development Company’s (SPDC) multibillion-dollar stake in a joint venture that operates oil fields by submitting bids.
This comes as Shell continues to pursue its earlier plans to divest from its Nigerian assets, particularly its shallow water and onshore interests.
The non-binding offers were submitted in January by Seplat Energy Plc, Sahara Group Ltd., Heirs Oil and Gas Limited, and ND Western Limited, according to several sources with knowledge of the negotiations who wished to remain anonymous.
According to Bloomberg, the sale of Shell’s 30% operating interest could generate up to $4 billion, though the oil major has yet to disclose to buyers the scope of potential future costs related to litigation or decommissioning and abandoning oil wells, which could significantly reduce the sale price.
Shell’s stake in its joint venture was valued at $2.3 billion by energy consultant Wood Mackenzie Limited in August 2021, assuming a long-term oil price of $50 per barrel. Brent crude, the international benchmark, is currently trading at just under $90 per barrel.