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Shell/BP: The big sell-off

Posted on Tuesday, 8 February 2011 16:41

Majors plan sales to assorted consortia, triggering welcome interest ?in Shell’s Nigerian assets as BP looks to raise much-needed cash

Two majors, Shell and BP, are setting up for a sale of African assets.

Shell is streamlining its downstream Nigeria oil rights and has triggered a stampede.

At least 18 consortia have been put together, involving illustrious names such as Rothschild.

Others include some usual suspects, such as Gazprom, and plenty of local partners, such as Afren, Oando and Seven Energy.

China is represented by Addax and Oryx, which Sinopec bought for $7.5bn in 2009.

Shell, with a difficult legacy in Nigeria, has struggled to maintain its production levels: various installations have been the target of militant attacks.

The sale of a string of onshore blocks last year was a sign of the direction that new Shell Nigeria CEO Peter Voser intended to take.

But with the recent sell-off of Shell distribution assets in Finland and Sweden, the Nigerian sale seems to be part of a strategic decision to focus more attention upstream.

Shell also holds valuable stakes in Nigeria’s offshore that are less vulnerable to militant attack.

Meanwhile, BP is looking to raise cash after the disastrous leak in the Gulf of Mexico.

It is set to sell its Algerian interests to the national oil company, which seems likely to exercise its pre-emption rights on the BP blocks, and so beat out a bid from Russia’s TNK-BP.

Sonatrach has recently struck gas in a joint venture with E.ON in the south east of Algeria.

This article was first published in the February 2011 edition of The Africa Report

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