NIGERIA HAS BLOCKED THE SALE OF PART OF ITS OIL ASSETS BY SHELL.

Nigerian authorities have blocked energy group Shell from selling its oil and gas assets on the African country's mainland and in the Gulf of Guinea, near the coast, the head of the Nigerian Petroleum Regulatory Commission, Gbenga Komolafe, said at a briefing in the Nigerian capital Abuja.

“The deal has failed the regulator’s test,” Reuters said. It did not say what specific complaints authorities have about the terms of the Shell asset sale.

In January, Shell reached an agreement with Renaissance, a five-company African consortium, to sell its Shell Petroleum Development Company of Nigeria Limited (SPDC), which produces oil on African mainland and in shallow waters. The size of the deal is estimated at $2.4 billion. SPDC has 15 onshore oil production leases and another 3 in the shallow waters of the Niger Delta. Their reserves are estimated at 6.7 billion barrels of recoverable oil and 56 trillion cubic feet of gas.

Last September, several communities representing residents of southern Nigeria filed a lawsuit in the country's High Court demanding that Shell's sale of its assets be halted until the group paid them $310 million in compensation for environmental pollution.

The Daily Post notes that Shell, like other major Western energy groups, is selling its assets on the continent due to security concerns. At the same time, Shell is expanding plans to produce oil on the Nigerian platform.

Nigeria is the largest oil producer in sub-Saharan Africa. In September, the republic produced 1.4 million barrels per day.