Tuesday, March 1, 2011

Vertex to shell out $120M for Shell's Niger Delta block

Vertex Energy made Shell an offer it could not refuse for the acquisition of swamp Block OML 40, effectively removing the licence from a list of four currently under auction in the supermajor’s second divestment programme. OMLs 30, 34, 40 and 42, all in Delta State, were offered by Shell in one of the most volatile areas of Nigeria’s oilpatch, attracting 18 consortia comprising Nigerian and international companies. OML 40 was one of the least prospective and it is understood a bid of more than $120 million swung the Vertex deal. For the remaining blocks bids have been received and   a bids qualification round was scheduled later this week in which suitors would have an opportunity to tweak their bids and convince Shell of their financial capacity and corporate social responsibility commitment before formal sales and purchase awards expected at the weekend.

Probable winners for the remaining blocks

OML34- Niger Delta Petroleum’s $600 million bid for OML 34 easily outshone the $290 million bid by the Seven Energy and Petrofac consortium and, barring technical considerations, will likely clinch it for the independent.

OML 42- India’s Essar Group in league with Nigerian-owned Energy Equity Resources remains the front-runner for OML 42 at $400 million, ahead of the Oando Group’s $300 million.

OML 30- OML 30 attracted an $800 million bid from Essar, $755 million from Afren, $750 from PanOcean, $650 million from Conoil, $600 million from Camac, $522 million from local independent EMO E&P, $515 million from African petroleum (Forte Oil) and $450 million from Oando.

The deals represent the latest in a series of Niger Delta farm-outs in which operator Shell and partners (Total and Agip) are selling a combined equity of 45% in sensitive swamp and creekside acreage.

To read more on Shell: http://docsearch.derrickpetroleum.com/research/q/Shell.html

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