Oil majors to divest $11 billion worth oil blocks in Nigeria
The international oil companies (IOCs) are expected to divest over 20 oil blocks with not less than 4 billion barrels of oil equivalent (boe) per day and a monetary value of about $11.5 billion before the end of 2014, the minister of petroleum resources, Mrs Diezani Alison-Madueke, has said.
The IOCs led by Shell, Total, Agip, Chevron and ConocoPhillips have since 2010 been divesting from their oil blocks, a situation attributed to issues being addressed under the protracted Petroleum Industry Bill.
The minister spoke while delivering a keynote address with the theme 'Assets Divestment in Nigerian Oil and Gas Industry: Opportunities and Challenges' at the ongoing 2014 Offshore Technology Conference (OTC) in Houston, Texas, USA.
She said that already the total assets divestment by the IOCs has hit about 2.2 billion BOE of hydrocarbon reserves at an estimated monetary value of at least $5 billion.
'By the end of this year, the total number of blocks that are likely to be divested is estimated to exceed 20 with not less than 4 billion BOE and a monetary value of about $11.5 billion,' she said.
Alison-Madueke however dismissed fears that the spate of divestment would lead to crisis in the nation's oil and gas industry.
For her, the divestment campaign by the majors is only changing the onshore corporate landscape and creating brownfield opportunities for upstream players looking to enter the Nigerian upstream space.
The minister maintained that the divestments signify a shift in the IOCs' strategy towards the offshore which now accounts for at least 60 per cent of Nigeria's total production.
According to her, the divestment has created an opportunity for participation in the industry by the Nigerian private sector.
She said that despite the divestment, the IOCs still remain very present in Nigeria with Shell still retaining ownership in 34 onshore blocks.
Giving reasons for the divestment, the minister said 'the fact is that a number of these IOCs are moving into the more challenging frontiers in the deep offshore and are leaving the onshore blocks which they consider less profitable'.
'In addition, some of them have been sitting on oil blocks and have allowed the acreages to go fallow for years without significant development,' she added.
The minister was represented by the group managing director of the Nigerian National Petroleum Corporation (NNPC), Engr. Andrew Yakubu.