Tuesday, April 5, 2011

Shell Has Picked Nigerian Company For Prized Oil Block - Sources


By Will Connors - Dow Jones Newswires - +234-708-246-045930

LAGOS, Nigeria (DowJones)--Nigerian company Conoil Plc. is the front-runner for a stake in one of Royal Dutch Shell's (RDSA, RDSA.LN) prized oil blocks in Nigeria, but the deal hasn't been finalized, according to two people familiar with the bidding.

Other bidders have been told Conoil is the winner in a competitive bid process, according to two people familiar with the situation. A Conoil spokesman Tuesday also confirmed a local press report that named Conoil as the winner, but declined additional comment.

Conoil is chaired by Mike Adenuga, a telecom executive who was recently listed in a Forbes magazine list of billionaires.

The deal is still subject to Nigerian government approval.

OML 30 is seen as the most attractive of four Shell blocks up for sale and is currently producing about 40,000 b/d. French firm Total SA (TOT: 62.06, +0.37, +0.60%) and Italian company Eni SpA (E: 50.41, -0.06, -0.12%) also had small stakes in the block.

Conoil outbid at least three other other local companies, Oando PLC (OANDO.LA), backed by Anglo-French company Perenco and Chinese-owned Addax Petroleum, Shoreline Energy International, backed by U.K.-based Heritage Oil PLC, (HOIL.LN), and African Petroleum PLC, according to two people familiar with the matter.

OML 30 is one of four onshore oil blocks Shell is selling in Nigeria. Shell has confirmed that it is selling the four blocks but declined to comment on the current negotiations.

Shell has been trying to reduce its footprint onshore Nigeria, where militant attacks and oil theft have slashed the company's output since 2006.

Last week, Shell closed a deal for another of the four blocks, OML 40, with Nigerian company Elcrest Exploration and Production Nigeria Ltd.

Copyright © 2011 Dow Jones Newswires

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