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UPDATE 2-Chevron is latest oil major to scale back in Nigeria
June 18, 2013 / 1:47 PM / 4 years ago

UPDATE 2-Chevron is latest oil major to scale back in Nigeria

* Chevron selling five Nigerian blocks in total

* Stake in reserves around 200-250 million oil barrels

* Nigerian firms, partnered with foreign firms, to bid

By Joe Brock

ABUJA, June 18 (Reuters) - U.S.-based Chevron Corp is selling five Nigerian shallow-water oil blocks, the company said on Tuesday, the latest oil major seeking to dispose of assets in Africa’s biggest producer.

Royal Dutch Shell, Italy’s Eni and France’s Total have sold several Nigerian onshore blocks in recent years, while U.S. firm ConocoPhillips is selling its Nigerian businesses to Oando Energy for about $1.79 billion.

Nigeria wants more direct ownership of its oil and gas, either through the state oil company or local firms, raising concerns among foreign oil majors they may lose smaller assets for nothing if they don’t sell now, industry experts say.

Nigeria also suffers from widespread oil theft and an at-times difficult relationships with local communities, driving up the costs of operating there, while a long-delayed energy bill is stuck in parliament, adding to industry uncertainty.

Yet foreign oil majors like Shell, Exxon Mobil and Chevron remain keen on expanding offshore Nigeria and want to keep hold of their biggest producing fields onshore, so any disposals have tended to be of smaller, more marginal onshore assets.

Chevron is selling its 40 percent stake in OML 52, 53 and 55 in the Niger Delta, the company said in a statement on Tuesday, after announcing the sale of the same-sized stake in OML 83 and OML 85 last week.

The sale will be handled by French Bank BNP Paribas , oil and banking sources told Reuters. The bank did not immediately respond to request for comment.

Chevron said it would prefer to sell to local Nigerian companies, in line with government regulations on boosting local ownership of its oil.

It said the disposal would bring down operating costs, improve efficiency and provide other smaller businesses, particularly Nigerian indigenous companies, opportunities to grow. “Chevron ... remains commitment to Nigeria,” it added, noting it had been in the country for more than 50 years.

First Hydrocarbon Nigeria, which has partnered with London-listed Afren on previous Nigeria deals, has already expressed interest in at least one block, oil sources said.

Chevron’s share of the five blocks would amount to reserves of between 200 million and 250 million barrels of combined crude oil and condensate, two oil industry sources told Reuters.

It did not disclose the reserves held in the blocks or what it expects to earn from the sales.

When Shell sold its blocks, although little-known local companies won the bids, they were partnered by smaller foreign firms, including Heritage Oil, Eland Oil, Afren and Poland’s Kulcsk Oil Ventures.

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