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Emerging investment opportunity is coming for indigenous oil and gas consortia if US group, ExxonMobil puts paid to its ongoing consideration to exit Nigeria’s downstream oil sector by selling off some oil and gas fields in the country at about $3bn or so.
Recall that the apparent decision to pullout is coming barely two and a half years after exiting Nigeria’s downstream oil sector.
Some Nigerian energy analysts, who bared their minds on the sudden development on Wednesday, said the move clearly presents a better chance for Nigerian indigenous operators to enter into mergers and come up with a deep pocket consortium and bid for the facilities from the US energy giant.
Exxon officials were said to have held talks in recent weeks with several Nigerian companies to gauge their interest in the fields.
One source said Exxon was soon due to open a “data room” – which would provide technical information on the fields, such as seismic and production details – in Nigeria.
The discussions focused on a number of onshore fields Exxon shares in joint ventures with Nigerian National Petroleum Corporation, including Oil Mining Leases 66, 68, 70 and 104, according to one source.
It was not clear if the drive to gradually exit the Nigerian oil and gas sector is powered by industry policy inconsistency, rising operating expenditure or better business environment so presented by the Shale oil exploration in the US after all.
Even though the Manager, Media and Communications, Mobil Producing Nigeria Unlimited, Mr Oge Udeagha, was economical with comments, he was quick to aver that “ExxonMobil is committed to its long-term business operations in Nigeria. As a matter of practice, we don’t comment on business discussions”.
In October 2016, the oil major divested its 60 per cent stake in Mobil Oil Nigeria Plc to Nipco Plc, an indigenous Nigerian downstream oil and gas company.
The Nigerian government has in the last decade supported a drive by domestic firms such as Oando Plc, Seplat Petroleum Development Company Plc and Aiteo Group to expand their operations in the country as international companies including Royal Dutch Shell sought to lower their presence due to oil spills resulting from pipeline sabotage.
Only recently, the United States-based oil major recently held talks on the sale of a suite of oil and gas fields in Nigeria as the company focuses on new developments in US shale and Guyana, Reuters quoted industry and banking sources as saying.
Details show that the potential disposals are expected to include stakes in onshore and offshore fields and could raise up to $3bn, according to two sources.
“Exxon is actively divesting in Nigeria,” one source, who was briefed on the divestment plans, was quoted as saying even as the company is yet to make a clear statement on the move before now.
Business Hilights can authoritatively report that ExxonMobil remains one of the largest oil and gas producers in Nigeria, with 106 operated platforms. Its oil output in the country reached 225,000 barrels per day in 2017, its website said.
Exxon’s share of oil production in those fields reached 120,000 bpd in 2017, the last year for which data was available.
Exxon is also weighing the possible sale of stakes in offshore fields in Nigeria, according to two sources.
Whereas the multinational recently launched the sale of its stake in Azerbaijan’s largest oilfield, which would mark its retreat from the former Soviet state after 25 years, it further announced earlier this year plans to boost its capital spending from $26bn in 2018 to $30bn in 2019 and up to $35bn next year as it seeks to develop oilfields in Guyana and the US Permian basin as well as gas projects in Mozambique and the US Gulf Coast.
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