Shell Considers Secret Sale of Ogoni Oil Fields

Shell Petroleum Development Corporation (SPDC) is secretly working to sell its licences in Ogoniland, Rivers State, including its stake in the 750 million barrels Oil Mining Lease (OML) 11, New Telegraph gathered yesterday.

Shell has 30 per cent holding, its partners, Total has 10 per cent while ENI holds 5 per cent in OML 11 located in the heart of the Ogoniland.

The company has shut down 23 producing fields on the OML 11 block, particularly Bomu and Ohuru. These fields have remained idle since clashes between the Movement for the Survival of the Ogoni People (MOSOP) headed by the late Saro-Wiwa and the Nigerian Army between 1992 and 1995.

For over 20 years, some of the assets have been lying unused and are becoming rusty as Shell and its host community in the area have been at loggerheads over the high level of oil leaks that have polluted the Ogoniland. An industry source familiar with the deals, however, said the planned sale is a part of the bigger scheme for the company’s total exit from Ogoniland. The major assets’ auction will, however, be executed only if the local Ogoni community agrees to it.

A news agency, StreamNG, had earlier reported that the Shell group wanted to kickstart the disposal process before Nigeria’s presidential election scheduled for next February “but it won’t complete a deal with a buyer until Goodluck Jonathan’s successor has been elected.”

“The future buyer will need to find a partner with particularly deep pockets. After 20 years of lying unused and damaged from sporadic clashes, oil infrastructure, and particularly pipelines, are in a disastrous state, and oil leaks have polluted the entire region,” the report said.

As in the case of other transactions, the decision to sell came only after several attempts by Shell to safeguard its interests in OML 11. In the early 2000s, following a decade of conflict and court cases with local communities, Shell ended the last legal wrangles in 2009 by forking out $15.5 million to the community.

It also agreed to allow two of the marginal fields – Oza and Asaramatoru – be carved out of the block and sold to local groups. Millennium Oil and Gas, which got Oza, has since joined forces with Britain’s Hardy, while Suffolk Petroleum, headed by Henry Macpepple, acquired Asaramatoru. But that failed to improve Shell’s relations with the Ogoni people as none of the two companies did the least work on the fields.

“The company is yet to secure Minister’s Consent for the sale of its stakes in OML 18, 24, 25 and 29 in the Niger Delta (AEI 728), as well as the major crude pipeline. “What is more interesting in this new and even bigger auction, is that some prominent indigenes of Ogoniland who are active in the Nigeria’s oil industry are on the top cadre of preference for the transactions.

“This is because the group perceives this as a major plan to put an end to the seeming intractable challenges it had at Ogoniland,” the source said Ogoniland was the theatre of violent clashes between residents and Nigeria’s security forces in the 1990s.

The Nigerian Content Act prescribes that Shell can only sell to a Nigerian group and, if possible, one that is controlled by prominent Ogoni figures, who alone can restore good relations with the local population. Following stormy negotiations 10 years ago, the Anglo-Dutch giant agreed to secretly transfer its operating role in OML 11 to Nigerian Petroleum Development Company (NPDC), the exploration and production unit of the Nigerian National Petroleum Corporation (NNPC).

Spokesperson for the NPDC, Mr. Ugo Atugbokoh could not be reached for comments on the new plans to sell the assets. His cell phone was switched off when New Telegraph called him.

It was learnt that some prominent businessmen that had served for years as intermediaries between the Ogonis and the Federal Government could be called back for the transactions. One of those who the source said could be involved in the renewed talks is Special Adviser, Research and Document to the president, Mr. Oronto Douglas, who was a former lawyer to the executed Ogoni leader, Mr. Saro-Wiwa. Douglas is the author of the fiery anti-Shell book titled: “Where Vultures Feast.”

Another prominent Niger Deltan, who could also get an offer, is the former Permanent Secretary, Ministry of Petroleum Resources, Ms. Ama Pepple, a native of Rivers State. Pepple and her son, Osamede Okhomina, CEO of Energy Equity Resources, are directors of a trust fund in favour of the Ogoni community that was financed by the $15.5 million damages that Shell paid following judgment in a suit filed against the oil company in 2009.

Spokesperson for Shell in Nigeria, Mr. Precious Okolobo, declined to comment on the new transactions, which is coming before the close of other assets sale worth $5 billion in Nigeria by the company. “No comment,” he said by telephone in response to inquiries from New Telegraph yesterday.

Source: New Telegraph

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