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IOCs may divest $11.5bn oil blocs in Nigeria

08 May 2014, 16:22

Houston - International Oil Companies (IOCs) operating in Nigeria may divest more than $11.5 billion (about N1.9 trillion) worth of oil blocs by the end of this year, Petroleum Minister Diezani Alison-Madueke has said.

The oil blocks account for about 2.2 billion barrels of crude worth about $5 billion or N840 billion.

The minister, who made the disclosure at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, however, allayed fears that the situation could lead to crisis in Nigeria.

Alison-Madueke, represented by the Group Managing Director of the NNPC, Andrew Yakubu, said:  “The divestment in the upstream sector of the oil industry by IOCs such as Shell, Total, Agip, Chevron and ConocoPhilips have continued to create an opportunity for participation in the industry by the Nigerian private sector.

“The divestment campaign was highly competitive and attracted interest from a number of indigenous and foreign companies.

“At the end of this, the total number of blocks that are likely to be divested is estimated to exceed 20 with not less than 4 billion barrels of oil equivalent and a monetary value of about $11.5 billion.”

Giving reasons for the divestment, the minister said “the fact is that a number of the IOCs are moving into 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 acreage to go fallow for years without significant development,” she said.

Divestment in Nigeria, according to her, signifies a shift in IOC’s strategy toward the offshore which now accounts for at least 60 per cent of Nigeria’s total production.

The minister, however, assured that the IOC’s remain very much present in Nigeria as Shell still retains ownership in 34 onshore blocks while Total, ExxonMobil and Chevron are still committing large amounts of capital to assets offshore Nigeria’’.

She said that Nigeria’s oil production had remained steady at about two million barrels per day, representing approximately 2.4 per cent of global production.

-   NAN

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