Oil Giant, Shell, To Divest From Nigeria

Royal Dutch Shell may sell stakes in two oil and gas fields in Nigeria, with Chinese oil firm CNOOC a potential buyer, the Wall Street Journal said.

The two 49.8% stakes could sell for as much as $900m (£435.8m, 606.4m euros), the paper reported.

China’s booming economy has sucked in commodities from all over the world and it has invested in a string of ventures in Africa in recent years.

Nigeria, Africa’s largest oil producer, remains wracked by poverty.

Despite Nigeria’s vast oil exports, few of its people have access to clean water or electricity.

Kidnappings and pipeline explosions are common in Nigeria’s Niger Delta region, where local groups complain that they do not see the benefits of the area’s oil wealth.

Security concerns in the Delta have previously forced Shell to temporarily reduce production.

Enter China

The past decade of growth in China has not only pushed commodity prices higher but also seen the Asian giant look further afield to get the raw materials and fuel it needs to power its economy.

China has huge oil investments in Sudan, a fact that has ignited the anger of campaigners who say this is blocking efforts to resolve the conflict in Darfur.

For Shell, a decision to reduce its presence in Nigeria may be welcomed by investors.

A sale would reflect well on a management which is “clearly not afraid to take hard decisions on assets which might be considered part of the family jewels”, said Citigroup oil analyst James Neale in a note.

Shell has declined to comment.

Story from BBC NEWS:


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