Royal Dutch Shell struck deals Wednesday to sell its 30 percent stake in four Nigerian onshore oil and gas fields and one pipeline to unnamed local buyers for as much as $5 billion.
A company spokesman confirmed that sales agreements for some of the company’s mining leases and a pipeline have been reached but the sales have not closed yet, the Guardian said.
The blocks were initially put up for sale last year. The four blocks are in the Niger Delta region and are Oil Mining Licenses 18, 24, 25 and 29.
The pipeline for sale is the 150,000 barrel per day Nembe Creek Trunk Line that transports oil from the Delta to the Atlantic coast for export.
Analysts had previously priced the assets at about $3 billion.
Shell holds a 30 percent stake in the assets for sale, sharing ownership with the Nigerian National Petroleum Corporation, France’s Total and Italy’s Eni.
Shell has contented with theft, break ins to its pipelines, disruptions and pipeline closures in the area for years.
The sale would free up cash for Shell to spend on share buybacks, dividend payments and new investments.
The sale is part of a larger $15 billion international asset sale designed to reduce costs and boost profits initiated when CEO Ben Van Beurden took the reigns in January.
Nigeria produces about 250,000 barrels of oil equivalent per day for Shell. The company will lose at least 80,000 barrels per day if all four fields are sold, the Guardian said.
A spokesman for the Shell Petroleum Development Company of Nigeria said it would make a formal market announcement once the sales process is complete.
However, Shell stressed that it will not totally divest from Nigeria.
“Nigeria remains an important part of Shell’s portfolio, where we will continue to have a significant onshore presence in oil and gas, and which has clear growth potential, particularly in deepwater and onshore gas,” the company said.