Chevron, Others to Divest From Nigeria

By Uche Mbah

Chevron, one of the Oil Majors operating in Nigeria, is the latest of the Upstream Oil majors to announce it’s planned divestment from Nigeria. Already phased divestment by the Royal Dutch Company, Shell, and Exxon Mobile has been ongoing, with the companies searching for buyers of their oil fields.

Part of the reasons given by the Oil majors is the scramble for American Shale oil, the newest fad in Oil exploration. The United States have opened it’s flanks the Oil majors for the exploration of shale, where the race is tightening amid environmental concerns.

According to Reuters, one of the main contenders for the Upstream production, San Ramon, a California based company, “is looking for buyers for a number of its the onshore and shallow offshore fields, where local producers have expanded their presence.”

San Ramon is  Nigeria’s third largest Oil Producer.

The Oil majors have Joint venture partnership with the Nigerian National Petroleum Corporation, but there has been for the most part a yo-yo game with NNPC over Joint venture cash calls. Recent issues over government position on the $62 billion dollars, which the Federal government is pursuing in their desperate bid to raise funds for the 2020 budget, only appears to be the immediate added incentive to divest, particularly with the Petroleum Industry Bill, PIB, which they frown at as unfavorable to their activities, being pursued by the National assembly. Minister of state for Petroleum had thrown up his arms in desperation saying it is just not possible to recover the whole $62 billion, though some may be recovered.

The National Assembly hope to pass the PIB by next year.

Last year, Chevron’s produced 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, the Company claimed in its website.

There appears to be no tender process being pursued by the companies: they are looking at direct consultations with potential buyers. Last year, Shell was reported to be having such discussions with Heir’s Holdings for the sale of two blocks worth $2 billion-Oil Mining licenses 11 and 17. Heirs Holdings is owned by billionaire businessman Tony Elumelu. Chevron itself is reported to be pursuing the same course, though it is not known with whom they are discussing.