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Published On: Wed, Oct 8th, 2014

Shell sells $2.5bn oil block to Nigerian Coy, Taleveras

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By Etuka Sunday with agency report

Royal Dutch Shell has agreed to sell a productive Nigerian oil block to a consortium led by oil-trading firm Taleveras Group, sources have disclosed.

According to Wall Street Journal, two persons familiar with the deal disclosed that Nigeria’s Taleveras will pay Shell more than $2.5 billion for the block, known as Oil Mining License 29, and an associated pipeline.

Shell has been working to sell several of its onshore Nigerian holdings, which for years have been plagued by leaks stemming largely from oil theft.

OML 29 is the largest of the southern Niger Delta assets that Shell put up for auction last year. In addition to the oil block, the Taleveras deal includes the approximately 60-mile Nembe Creek pipeline, an aging pipe prone to leaks but which still serves as one of the country’s main crude arteries.

WSJ further reported that Shell spokesman declined to comment specifically on OML 29.

“We have signed sales and purchase agreements for some of the oil mining leases but not all that we are seeking to divest. In the event of a successful completion of the sales process we shall make a market announcement,” he said.

Taleveras said it was among the preferred bidders for block OML 29 but declined to comment when asked whether a deal had been finalized. Selling the Nembe Creek Trunk Line—which moves oil through the Delta to the Atlantic coast—would be Shell’s biggest move yet to exit onshore crude production in a region that has caused problems for decades. Over the past year, the Nembe Creek line has had multiple punctures and closures, and at least one fire.

However, it is also a potentially lucrative source of revenue, given that other companies pumping oil in the region pay to use it to get their crude to market.

“This is a very good deal for Taleveras. OML 29 still pumps a lot of oil, and they can get the rents from the Nembe Creek pipeline,” said one of the people.

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