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Oil Majors Frustrated by Slow Progress of Nigerian Asset Sales - BLOOMBERG
- Executives commented at Nigerian energy summit in Abuja
- ExxonMobil, Shell and Eni are awaiting divestment
(Bloomberg) -- Oil majors voiced their frustration at Nigeria’s slow progress in approving asset sales in the West African nation.
Optimism that President Bola Tinubu’s arrival in office in May would expedite deals in Africa’s biggest oil producer is starting to dissipate. Exxon Mobil Corp. agreed to sell its shallow-water oil assets to Seplat Energy Plc almost two years ago, but the transaction has yet to complete amid objections from state-owned Nigerian National Petroleum Co. Eni SpA and Equinor ASA are also waiting for regulatory approval to finalize the sale of Nigerian assets.
Many of the sales involve onshore assets that have been plagued by theft and ecologically damaging oil spills. In January, Shell Plc agreed to sell its Nigerian onshore oil business to a group of local companies for more than $1.3 billion, in a deal that would fulfill the company’s long-term goal of extracting itself from a challenging operating environment in the Niger Delta.
There is an “urgent need to conclude these transactions,” Osagie Okunbor, managing director of Shell Nigeria, said at a conference in Abuja this week.
Read More: Shell to Sell Nigeria Onshore Oil Business for $1.3 Billion
Abdulrazaq Isa, chairman of Waltersmith Petroman Oil Ltd. — which is part of the Renaissance consortium acquiring Shell’s assets — said that approving the deals would help revive Nigeria’s flagging oil industry.
“This remains the most realistic and successful avenue to bolster national crude oil production by the turn of the decade,” said Isa, speaking as head of an association of indigenous oil producers.
Exxon said delays in approving the sale of its assets to London-listed Seplat were causing uncertainty for the communities and contractors that depend on those operations.
“It’s imperative that it’s concluded and that clarity is provided to everyone involved,” Exxon Nigeria Chief Executive Officer Shane Harris said at the same conference. “What’s really important is it helps resolve a significant amount of uncertainty that currently clouds thousands of people.”
Oando Plc’s acquisition of Eni’s Nigerian unit, which has interests in onshore oil and gas blocks and power generation, has been challenged by NNPC over the failure to obtain prior authorization.
“We do need the reviews, consent to come quickly,” said Oando Executive Director Ainojie Alex Irume. “We do need to get on these assets and start working on them.”
The departure of international oil majors from onshore operations in Nigeria has coincided with years of declining investment in the industry. The regulator said there was no lack of urgency on its part in approving deals.
“So let the message be taken home that the regulator is in no way trying to be a show-stopper in this respect,” said Gbenga Kommolafe, CEO of the National Upstream Regulatory Agency.
