Shell completes $1.7 billion lease, trunk line sale in Nigeria

Shell Petroleum Development Co. of Nigeria Ltd. (SPDC) has completed its assignment of interest in oil mining lease 29 (OML 29) and the Nembe Creek trunk line (NCTL) and related facilities in the Eastern Niger Delta to Aiteo Eastern E&P Co. Ltd. for $1.7 billion.

OML 29 covers 983 sq km and includes Nembe, Santa Barbara, and Okoroba fields and related facilities. NCTL, which was commissioned in 2010, is a 100-km, 600,000-b/d system that transports oil to the Bonny crude oil terminal (BCOT).

BCOT is not part of the transaction and will remain owned and operated by the SPDC joint venture. Among the divested assets are flow stations, associated gas systems, and oil and gas pipelines within the OML. The divested fields produced 43,000 boe/d during 2014.

Total E&P Nigeria Ltd. and Nigerian Agip Oil Co. Ltd. also have assigned their respective 10% and 5% interests in the lease, giving Aiteo Eastern E&P 45% interest in OML 29 and NCTL.

SPDC says all approvals have been received from the relevant authorities of Nigeria.

SPDC operates a JV with 30% interest alongside Nigerian National Petroleum Corp. with 55%, Total 10%, and Nigerian Agip Oil 5%.

During 2011-12, SPDC shed interests in several other Nigerian OMLs. Just last week, the company completed its assignment of 30% interest in OML 18 to Eroton Exploration & Production Co. Ltd. for $737 million (OGJ Online, Mar. 20, 2015).

Altogether, proceeds from those sales totaled about $2 billion.

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