Nigeria: Chinese Seek Shell Upstream Assets

The sale of a string of onshore oilfields by Shell, the largest international oil company in Nigeria, represents a significant shift in strategy by the oil giant since the appointment of its new chief executive, Peter Voser, in July. Industry insiders said that Shell, which has been struggling for years to maintain production levels in Nigeria amid widespread sabotage, theft and piracy, had commenced discussions about the sale of a number of its smaller producing fields, as well as undeveloped blocks and fields in which production has been curtailed by security troubles.

Shell is not leaving Nigeria and is keen to keep the bulk of its operations in the country. Neither is it selling any of its offshore interests, which are less vulnerable to rebel attacks and piracy. Insiders said the fields have drawn interest from a variety of international groups, as well as CNOOC and Sinopec. Indian companies are thought to be interested and UK-based independent oil explorers, including First Hydrocarbon Nigeria, part of London-listed Afren, are studying the opportunity.

An insider familiar with the talks said that Shell was likely to sell the fields in individual transactions in the first half of 2010.

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