Shell to receive final bids from Nigerian mogul Tony Elumelu’s oil firm, others for $2.3-billion oil assets

Mfonobong Nsehe -

Shell Plc, a British multinational oil and gas company, is set to receive final bids for its stake in its Nigerian joint venture from Nigerian businessman Tony Elumelu’s Heirs Holdings and ND Western Limited.

According to sources close to the bidding process launched by Shell in early February, Heirs Holdings and ND Western Limited, an independent Nigerian oil and gas exploration company, are expected to make final bids to acquire a 30-percent stake in the joint venture, which operates assets in the Niger Delta and nearby offshore areas.

The move comes nearly a year after the British multinational oil and gas giant announced plans to divest its interests, noting that its long-term energy transition blueprint is out of sync with the operating environment in Nigeria, where oil installations and pipelines are targets for vandals and crude spills and theft are common.

This perfectly aligns with the changing dynamics in the energy sector, as leading energy companies with operations in Nigeria, such as ExxonMobil and Total Energies, offload their oil assets as part of a strategic move to accelerate investments in sustainable energy options.

Based on a long-term oil benchmark of $50 per barrel, Wood Mackenzie estimated Shell Petroleum Development Company’s offshore assets to be worth $2.3 billion in 2021.

With crude oil trading between $110 and $120 per barrel, experts believe the oil assets controlled by Shell’s Nigerian subsidiary will be worth more than the $2.3 billion previously estimated by Wood Mackenzie.

Heirs Holdings oil & Gas, an operating unit of Elumelu’s privately held investment conglomerate Heirs Holdings, has been active in its pursuit of a leadership position in Nigeria’s oil and gas industry.

The unit presently owns a $1-billion operating stake in the Oil Mining Lease 17 (OML-17) permit in southern Nigeria. Nearly four weeks ago, the oil company issued a tender for work on its OML-17 Multiphase Pump Gathering Station Project.