Oil exploration company, Shell, wants out of Nigeria due to costly repair operations, sabotage, vandalism of pipelines and high profile, costly lawsuits.

"We've drawn that conclusion, and we're now talking to the Nigerian government on the way forward," Shell's CEO Ben van Beurden said during the company's annual general meeting this week.

"We cannot solve community problems in the Niger Delta, that's for the Nigerian government perhaps to solve.

"We can do our best, but at some point in time, we also have to conclude that this is an exposure that doesn't fit with our risk appetite anymore," van Beurden added.

Since the 1930s

Shell commenced mining operations in Nigeria in 1937. However, the company's relationship with communities in the oil-rich Niger Delta region has deteriorated through the years.

As the biggest onshore operator in Nigeria, Shell has often been accused of oil spillages that have damaged farmlands irreparably and imperiled livelihoods.

In February, a Dutch court held Shell's Nigerian subsidiary responsible for multiple oil pipeline leaks in the Niger Delta.

The company was thereafter ordered to pay unspecified damages to farmers.

In 2020, Shell also lost an oil spill case at a Nigerian High Court, that could see the company shelling out $44 million in damages.

Nigeria's Minister of State for Petroleum Resources, Timipre Sylva, confirmed in a statement that the government is in talks with Shell on divesting its onshore stakes.

Shell may likely transfer its onshore oil and gas joint venture to Nigerian subsidiary Shell Petroleum Development Company (SPDC), another local company or another foreign company.

Reuters reports that SPDC has sold about 50% of its oil assets over the past decade.

Shell's stake in SPDC gave it 156,000 barrels per day of oil equivalent in 2020, of which 66,000 barrels were oil.