ABUJA (Reuters) – Nigerian oil blocks being sold by Royal Dutch Shell only need the signature of the incoming energy minister to be concluded but negotiations with the state oil firm could still cause delays, sources said.
Shell along with foreign oil major partners Total and Eni have agreed to sell their share in four onshore oil blocks which Shell operates in the onshore wetlands in the Niger Delta but the next minister needs to approve the deals.
President Goodluck Jonathan, who was sworn in for his first full term a month ago, submitted a list of nominees for his new cabinet on Wednesday. The list includes outgoing oil minister Deziani Alison-Madueke.
“The deals are on the desk waiting for the signature of the oil minister when he or she arrives. Obviously the buyers would like the previous minister back because she understands the deals well,” one source involved in the deals told Reuters.
State-oil firm NNPC which owns the majority stake in the blocks has said its subsidiary would take over from Shell as operator of the fields once the deals are completed.
But Poland’s Kulczk Oil Ventures, which is part of a consortium that has a deal for one block, understood that one of its partners would take over as operator.
There could be a compromise where NNPC’s subsidiary NPDC operates some, but not all four, of the blocks. If two parties cannot agree on who operates the block they could enter arbitration which would cause lengthy delays.
Kulczk’s consortium agreed a deal for block OML 42 while independent energy firm Eland Oil, in partnership with Nigeria’s Starcrest, has agreed to buy OML 40. It is likely the foreign firms will want to be the operators, the sources said.
The two remaining blocks were won by local Nigerian partnerships. Niger Delta E&P and Petrolin won OML 34 and Conoil picked up OML 30. Alison-Madueke said earlier this month that NPDC would be operating these blocks.
“Since NNPC has 55 percent of the said blocks (OML 34, 30), the decision was taken that in those two we would hold operatorship of those blocks on behalf of the federal government for the safety and security of our assets and the security of the economy as a whole,” she told local This Day newspaper.