out of gas

Legal proceedings will have ‘little impact’ on Shell asset sale

By Temitayo Lawal

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Posted on June 29, 2022 09:44

 © REUTERS/Rick Wilking.
REUTERS/Rick Wilking.

Legal proceedings against Shell in Nigeria will have “little impact on the deal,” an energy industry analyst who is knowledgeable about the workings of the oil sector tells The Africa Report. 

“All the risks would have been captured or will be captured in the due diligence of the potential buyers. There may be some delay due to the court injunctions and potential need to negotiate with the community, but this will not halt the deal,” he says.

This stance is corroborated by Uwa Osadiaye, a senior vice president and oil and gas analyst at FBNQuest, who argues that since the decision to sell is from Shell Global, due to its energy transition and asset portfolio optimisation plans, the company will not think twice about selling, especially considering how their Nigerian onshore assets are comparatively expensive and inefficient to operate.

“Oil companies were ready to write off value in Russia at the beginning of the conflict. Paying compensation to host communities to achieve their energy transition goal is much easier,” he says.

Asset sale

Last month, there were reports that

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