According to three sources familiar with the process, at least five Nigerian oil and gas companies are ready to submit bids this month for Royal Dutch Shell’s onshore oilfields, which could fetch up to $3 billion.
Last year, Shell began talks with the Nigerian government about selling its stake in the country’s onshore oilfield, where it has operated since the 1930s, as part of a global effort to decrease carbon emissions.
The Anglo-Dutch Corporation holds shares in 19 oil mining licenses in Nigeria’s onshore oil and gas joint venture (SPDC), which are valued at $2 billion to $3 billion, according to industry and banking sources.
SPDC (Shell Petroleum Development Company of Nigeria) is run by Shell, which owns a 30% share in the company. The Nigerian National Petroleum Corporation (NNPC) owns 55 percent, TotalEnergies (TTEF.PA) owns 10%, and ENI owns 5%.
Shell has also faced spills in the Niger Delta for years as a result of pipeline theft and sabotage, as well as operating concerns, resulting in expensive repairs and high-profile lawsuits.
Independent Nigerian oil and gas companies such as Seplat Energy, Sahara Group, Famfa Oil, Troilus Investments Limited, and Nigeria Delta Exploration and Production (NDEP) have expressed interest in the sale, according to sources.
At this time, no international oil corporations are expected to participate in the bidding process, according to the sources, who added that offers were due by January 31.
A spokeswoman for Shell declined to comment. The Sahara Group declined to comment on market rumors. Requests for comment from Seplat, Famfa, Troilus, and NDEP were not immediately returned.
According to the sources, the state-controlled NNPC could choose to exercise its power to pre-empt any sale to a third party.
Many international banks and investors have been leery of oil and gas assets in Nigeria due to concerns about environmental difficulties and corruption, they said, making it uncertain whether possible bidders could secure adequate financing.
However, they noted that some African and Asian banks were still eager to finance fossil fuel projects in the region.
According to sources and documents were seen by reporters, Troilus has hired Nigeria-focused Africa Bridge Capital Management to raise up to $3 billion for the properties. Africa Bridge Capital did not respond to a request for comment.
Buyers of Shell’s assets will have to demonstrate that it can deal with future damage to the oil infrastructure that has decimated Nigeria’s Delta in recent years.
