As IOCs rake in billions from divestment of Nigerian oil assets

Last week, it emerged that Shell has put up for sale four onshore oil blocks with a combined production capacity of around 70,000 barrels per day (bpd), which is valued at about $1.5 billion per block.

In what is the latest of the disposing of assets by international oil companies (IOCs), Shell plans to sell oil mining licences (OMLs) 18, 24, 25 and 29.

Also, last week, Chevron was said to be considering bids from prospective buyers of three oil blocks with total reserves of around 134 million barrels. Chevron, which is putting up five blocks for sale, recently opted out of the Olokola Liquefied Natural Gas project (OKLNG), one of the biggest proposed LNG projects in the country.

In the past four years, IOCs have divested not a few of their oil assets in Nigeria, Africa’s top oil producer, deriving earnings of over $7 billion from the sales.

Shell Nigeria recently disclosed that it was holding back its planned investment of about $30 billion in two offshore deep water projects.

In 2012, Shell, Total, ConocoPhillips and Agip divested part of their stakes in the oil and gas industry.

Last year, Shell, Chevron, ExxonMobil, Total SA and Eni, who pump about 90 percent of Nigeria’s oil through ventures with the NNPC, had said in a joint presentation to the legislature, that the proposed higher taxes in the PIB would make exploration of oil and gas uneconomical. Total, the French giant, sold its 20 percent stake and operating mandate of its Nigerian offshore project to a local unit of China’s Sinopec for $2.5 billion last year.

ConocoPhillips, US-based oil group, sold its onshore assets after 46 years of operation in Nigeria to affiliates of Oando plc, realising about $1.7 billion from the sale. This includes two offshore properties consisting of a 95 percent operated interest in OML 131 and 20 percent interest in OPL 214, as well as a 20 percent interest in onshore OMLs 60-63, a 20 percent interest in the Kwale-Okpai Independent power plant and a 17 percent interest in the Brass LNG project.

Royal Dutch Shell plc, the Anglo-Dutch oil giant, was said to have received cash proceeds of over $2 billion from the sale of eight OMLs, which it operated in the Niger Delta, these include OML 30, OML 34, OML 40, OMLs 26, 42, 4, 38 and 41. The divestments started since 2010.

Last year, it sold its 30 percent interest in OML 30 in the Niger Delta to Shoreline Natural Resources Limited for a total cash proceeds of $567 million. The divested infrastructure includes most of the Trans Forcados major crude oil pipeline from OML 30 to the Forcados River manifold.

Total E&P Nigeria Limited (10 percent) and Nigerian Agip Oil Company Limited (5 percent) also sold their interests in the lease, ultimately giving Shoreline a 45 percent interest.

By: FEMI ASU