After concluding that its onshore oil position in the Niger Delta is no longer worth the risk, Shell is in talks with the Nigerian government to exit onshore oil fields as part of its green push plan.
Shell’s CEO, Ben Van Beurden, did not explicitly say that Shell would exit onshore Nigeria completely or give a timeline for any potential asset sales, however, a full retreat would be expected. Shell has reduced its total number of onshore licenses in Nigeria by half over the past decade.
The Anglo-Dutch company has been gradually selling onshore assets in the West African country for more than a decade, as it sought to put aside chronic problems such as pollution caused by ruptured pipelines and the resulting legal battles with local communities.
After almost 50 years of pumping oil out of Nigerian onshore oil fields, Shell finally acknowledged that its operations aren’t compatible with plans to go green.
“The balance of risks and rewards associated with our onshore portfolio is no longer compatible with our strategic ambitions,” CEO Ben van Beurden told investors at Shell’s annual general meeting on Tuesday. “We cannot solve community problems in the Niger Delta“ and the company has started discussions with the government on how to move forward, he said.
The issue has become more acute in the past year after Shell pledged to transform itself into clean energy giant and gradually wind down its oil and gas business to achieve net-zero carbon emissions by 2050.
