Essar Energy is out of the race to buy Royal Dutch Shell Plc’s stake in four Nigerian oil fields after the Netherlands-based firm rejected its bid.
The company had bid for buying a stake in all the four onshore blocks in the Niger Delta that Shell had put on offer. However, Shell did not find Essar’s offer for any of the blocks — OML 30, 34, 40 and 42 — attractive, sources privy to the development said.
When contacted, an Essar spokesperson said: “Essar Energy can confirm that it had bid, as part of a consortium, for Shell’s blocks in Nigeria. However, it is no longer in the race.”
The spokesperson did not elaborate.
For the highly prospective OML 30 block, Essar was up against Conoil, Shoreline Energy and the UK-registered Afren, with the winning bid reportedly exceeding $1 billion.
The sources said Essar had bid together with the Nigerian-owned Energy Equity Resources and the UK-based Sacoil.
Four consortiums were shortlisted by Shell as preferred bidders for the four onshore blocks in Nigeria’s troubled Niger Delta that it is looking to offload, included a grouping led by Perenco of France with Swiss trading firm Addax & Oryx Group Ltd and Oando Plc of Nigeria.
Another bidding group includes Heritage Oil Plc of the UK and Nigerian contractor Shoreline Energy International. Vertex Energy, backed by Capital Alliance, is also in the race, they said.
Also in the running, though not necessarily preferred bidders, are long-standing Nigerian National Petroleum Corporation (NNPC) joint venture partner PanOcean, Nigerian independent Conoil and the Seven Energy tie-up with international construction contractor Petrofac.
Shell is divesting stakes in the onshore fields as part of its plan to sell $5 billion of assets this year. The company, based in Hague, The Netherlands, has sold about $30 billion of assets over the last five years and last month said it would to sell its retail fuel business in 14 African countries for $1 billion to oil trader Vitol Group and a private-equity firm.
Shell intends naming one preferred bidder for each of the development blocks, OML 30, 34, 40 and 42, although some suitors bid for all four and others indicated a preference for two contiguous licences.
The winning group will take over the 45 per cent concession equity held by operator Shell along with junior partners Total and Agip, leaving the NNPC with the same 55 per cent stake it currently holds.