Total, one of the Oil Majors that are the Upstream Joint Venture Companies in Nigeria, is seeking to sell off their 12.5 share of Oil Mining Lease, OML 118. Shell dominates with 55% of the block, while Eni and Exxon Mobil are holding 2.5% and 20% respectively. Indications are that Total is seeking for buyers as part of their phased shedding off of their African portfolios to enhance their international expansion, according to Reuters. While divesting from Nigeria, it is poised to buy Anardaco’s African portfolio for $8.8 billion as part of its takeover by US rival, Occidental Corp.
The $750 million block is located 75 miles off the Niger Delta.
This coincides with the trying period when other oil majors are pulling resources out of Nigeria, while Nigeria is expanding its tax regime over the majors. Earlier in the week, President Muhammadu Buhari signed into law the PSC bill in far away London where he is on a private visit to. This seeks to earn more from the majors through tax and share ratio of upstream revenue. This Magazine had reported the divestment of Chevron from Nigeria.
Even Royal Dutch shell has been doing a phased withdrawal. Industry sources indicates that the company had shed close to fifty percent of the total work force within the last five years, though part of the reasons given is the scramble for America’s shale oil.
Reuters said investment bank Rothschild is behind the sale process for Total. Total is said to target selloff of assets worth $5 billion by 2020.
Output from the block is expected to grow to 200,000bpd, equivalent of 10% of Nigeria’s current production output.
Shell postponed investment on Bonga last year, but, with the PSC bill into law, it appears they will dither indefinitely, pushing back a tender for bids which it launched in February this year for a 225,000bpd floating vessel.
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