Political, Security Instability deters Investors as Oil Majors lose apathy for Nigeria’s crude, plans oilfields sale

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    * Chevron selling some onshore, shallow offshore assets -sources

    * Company focusing on developing U.S. shale

    by Godwin Okafor

    LAGOS/LONDON, Oct 29 – Nigeria’s on-going political instability and rising regional conflict deters foreign investors as Chevron joins other oil Majors seeking to sell several Nigerian oilfields as part of a global drive to reshape its portfolio as it focuses on growing its U.S. shale output, banking and industry sources said.

    Chevron joins rivals including Exxon Mobil and Royal Dutch Shell in a drive by foreign oil companies to reduce their footprint in Africa’s largest oil producer which has been mired in political and security instability in recent years.

    The San Ramon, California-based company, Nigeria’s third largest oil producer, is looking for buyers for a number of its the onshore and shallow offshore fields, where local producers have expanded their presence.

    Chevron did not respond to a request for comment.

    Chevron’s Nigerian subsidiary operates and holds a 40% interest in 8 blocks in the onshore and near-onshore regions of the Niger Delta under a joint venture with Nigeria’s National Petroleum Company (NNPC), according to its website.

    The discussions are being held directly with potential buyers and Chevron is not planning to launch a tender process for the assets at this stage, two of the sources said.

    In 2018, Chevron’s production in Nigeria reached 194,000 barrels of crude oil per day, 233 million cubic feet of natural gas per day and 6,000 barrels of liquefied petroleum gas (LPG) per day, according to its website.

    Exxon plans Nigerian exit

    The potential disposals are expected to include stakes in onshore and offshore fields and could raise up to $3 billion, two sources said.

    “Exxon is actively divesting in Nigeria,” one source who was briefed on the divestment plans said.

    Exxon declined to comment.

    The Irving, Texas-based company is one of the largest oil and gas producers in Nigeria, with 106 operated platforms. Its oil output in the West African country reached 225,000 barrels per day (bpd) in 2017, its website says.

    Exxon officials have held talks in recent weeks with several Nigerian companies to gauge their interest in the fields.

    One source said Exxon was soon due to open a “data room” – which would provide technical information on the fields, such as seismic and production details – in Nigeria.

    The discussions focused on a number of onshore fields Exxon shares in joint ventures with Nigerian state oil firm NNPC, including oil mining leases 66, 68, 70 and 104, one source said. Exxon’s share of oil production in those fields reached 120,000 bpd in 2017, the last year for which data was available.

    Exxon is also weighing the possible sale of stakes in offshore fields in Nigeria, two sources said.

    It is looking into offering for sale assets in Equatorial Guinea and Chad, according to two sources.

    The Nigerian government has in the last decade supported a drive by domestic firms such as Oando, Seplat and privately held Aiteo to expand their operations in the country as international companies including Royal Dutch Shell sought to lower their presence due to oil spills resulting from pipeline sabotage.

    Exxon recently launched the sale of its stake in Azerbaijan’s largest oilfield, which would mark its retreat from the former Soviet state after 25 years.

    Exxon announced earlier this year plans to boost its capital spending from $26 billion in 2018 to $30 billion in 2019 and up to $35 billion next year as it seeks to develop oilfields in Guyana and the U.S. Permian basin as well as gas projects in Mozambique and the U.S. Gulf Coast.

    In an analyst presentation last month, Exxon said it would accelerate its divestments to around $15 billion by 2021.

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    Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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