Nigeria in Talks With Shell Over Onshore Divestment Plans

Nigeria is encouraging Royal Dutch Shell Plc to keep its onshore oil and gas business in the country instead of divesting it, as the company seeks to focus more on cleaner energy and offshore production.

While the government is in discussions with Shell about its future in the country, “some actually feel also that Shell should not hurriedly divest and to at least stay” onshore, Timipre Sylva, Nigerian minister of state for petroleum resources, told reporters in Abuja. To have a situation “where Shell has completely divested from a sector is not good for us.”

The Anglo-Dutch energy giant has been gradually selling its onshore assets for more than a decade in Nigeria -- an OPEC member and Africa’s largest oil producer -- as it seeks to put aside problems related to ruptured pipelines and legal battles with local communities.

Shell Chief Executive Officer Ben van Beurden said Tuesday that the company was in conversations with the Nigerian government on “a way to move forward” as oil spill risks associated to its onshore were not aligned with its energy transition strategy. However, he did say that it would focus on its deepwater and gas investments in the country.

“Shell has announced their intention to divest from their onshore assets and focus more on the offshore,” Sylva said. “We are actually in talks with them on how we are going to achieve it.”

Options on the table include a potential divestment to the Nigerian Petroleum Development Company Ltd., a unit of the state oil company, according to the petroleum minister. Other possibilities include involving local and other foreign independent operators in the process, he added.

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