Nigerian Companies Buying Up Foreign Owned Oil Fields

Nigerian Companies Buying Up Foreign Owned Oil Fields
Oil Rig

AFRICANGLOBE – United States giant Chevron has become the latest oil company to sell a major stake to Nigerian companies as uncertainty over security continues to worry investors.

A number of multinational oil companies in Nigeria have been unsettled by the increasingly fragile security situation and a proposed overhaul of regulations, royalties and taxes by parliament.

Chevron is Nigeria’s third-biggest oil producer, after Shell and Exxon, with daily output at 238,000 barrels of crude per day as of last year.

It joins Shell and Total in selling its shares to local companies.

Chevron is expected to sell 40 percent of its shareholding in oil mining charters located in the country’s southern Niger Delta region.

Shell, the British-Dutch oil group also sold the majority of its shares in its Nigerian operation and decided to focus offshore, where the risks of sabotage, theft and militant attacks are lower.

In April, Brazilian oil company Petrobras, which began operations in Nigeria less than 20 years ago also announced its intention to sell its Nigerian oil fields to raise cash for domestic projects.

In 2012, French oil group Total sold its 20-percent stake in a Nigerian offshore bloc to China’s Sinopec for $2.5 billion.

Following China’s purchase of Sinopec, Nigerian firm Oando announced the purchase of U.S. oil group ConocoPhillips’ interests in the country.

Seplat, a local oil group, which acquired a stake from Shell, has encouraged indigenous oil companies to buy stakes from International Oil Companies (IOCs).

IOCs have sold close to 50 percent stakes in over seven concessions with huge financial returns.

The selling of oil stakes in Nigeria allows the selling companies to prioritise the most attractive opportunities and reconfigure or exit from less attractive ones.

However, former president of the Nigerian Association of Petroleum Explorationists (NAPE), Afe Mayowa says the move by Chevron, Shell and Total among others will aid the development of marginal fields in Nigeria.

Mayowa argues the acquisitions by indigenous oil groups will boost the country’s daily oil production. Currently Nigeria produces around 2.0 million barrels of oil per day.

 

By: Konye Obaji Ori