Sopuruchi Onwuka

With three parties from government and private sides sharing the Shell sentiment at discussion table with the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), pundits think that the emetging setting lays the stage for sanctioning of the lingering divestment of Shell’s SPDC to Renaissance consortium.

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The Oracle Today reports that recent changes in the management and board of the Nigerian National Petroleum Company (NNPC) Limited would now place a Shell man to be at the center at ongoing negotiations between fellow Shell men and a government bureaucrat over divestment of Shell’s troubled oil assets in the onshore, swamp and shallow water Niger Delta.

Despite several consultations between Shell and the Nigerian acreage administrator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the sale of the company’s stakes in operated joint venture with the Nigerian National Petroleum Company (NNPC) Limited is yet to close.

Enquiries by The Oracle Today yielded that the company and its partners are yet to reach acceptable agreement on key issues that border on the specific oilfields, exploration blocks and industry production facilities included in the basked of assets  Shell has presented to the Renaissance consortium which is waiting in the wings with significant $2.4 billion offer.

The number, quality and status of specific assets have formed the crux of issues that demand careful resolution as the partners’ interests clashed with the overriding commercial stakes of the NNPC Limited which, according to recent indications, is struggling to claw back control of some joint venture operations.

There have been hints that unresolved issues around the massive OML 11 located in areas where Shell has found it difficult to operate freely and safely remain a key subject of heated discussion as government and private parties repeatedly visit the list of assets on auction.

“Both the number and size of assets are at dispute,” a source close to NNPC Limited told our correspondent. The source added that government parties to the negotiation are looking at ways of clawing back some of the assets lavishly assigned to Shell in the early days of the industry.

It would be recalled that Shell and NNPC had earlier disputed stalled attempts by the national oil company to re-enter OML 11 following a presidential order issued by former President Muhammadu Buhari who sought to defy community resistance to industry operations in Ogoni land.

Former President Buhari was an ardent supporter of late military despot, General Sani Abacha, under whose government Ogoni leaders were executed following mineral rights disputes with government and its operators.

The attempted reentry into OML 11 had signaled government’s desire to snatch back parts of some oversized assets sitting idle in operated concessions. It also accelerated the eventual divestment of Shell’s JV portfolios in one fell swoop.

However, the issues remain as the NUPRC and the NNPC exert overriding influence to maintain solid grip on the assets where the interests of Shell and its partners are in transaction.

It is understood that the NUPRC has laid a proviso requiring Shell to give up some assets in order to enable the divestment proceed. And it appears that new buyers are also waiting on the flanks to grab some of the assets as soon as they appear on auction at future bid rounds scheduled by the regulator.

Industry sources keenly following the development reveal that the NUPRC is working to excise nearly 100 oilfields and associated industry facilities from the divestment basket, an attempt Shell resists.

So, whereas the NUPRC works confidently to recover some assets from Shell for the upcoming bid rounds, Shell continues to operate the assets on behalf of Renaissance in accordance with the terms of the year old acquisition deal.

The Nigerian Upstream Petroleum Regulatory Commission has attempted to reclaim more than 90 fields from Shell’s Nigerian subsidiary as it prepares for its upcoming oil block tender. Yet just days earlier, the regulator had approved their $2.4bn sale to Renaissance.

According to sources, the NUPRC has required Shell to rework the divestment deal with Renaissance to enable it push through but the oil major appears to be reluctant to return with a new plan which would entail a slash in the number of oil blocks on offer.

However, with the changes that have overwhelmed government’s institutions in the petroleum industry, analysts predict that the new context might produce conditions that will ultimately push the transaction through.

With President Tinubu currently dispensing with inherited technocrats that control regulations, and with the recent changes that puts a Shell man at the helms of NNPC Limited; observers seen greater understanding among the national oil company, Shell and Renaissance all of which hold the sentiments and patterns of  corporate Shell.

Most importantly, it is also rumoured that a key factor in the Renaissance consortium has achieved a crucial closeness with the president, a political jagaban recognized for honoring and rewarding loyalty.