Chevron to Sell 40% Stake in Two Oil Blocks

 Chevron Nigeria Limited (CNL) will be selling its 40 per cent stake in two Nigerian shallow water oil blocks, a spokesman for the company said Tuesday.

“Chevron Nigeria Limited is selling its interest in Oil Mining Leases (OMLs) 83 and 85. Chevron has 40 per cent interest in the two blocks,” spokesman for CNL, Deji Haastrup, told THISDAY in Abuja without further details on the planned transaction.

However, Reuters, quoting industry sources, said the two blocks OML 83 and OML 85 hold an estimated 200 million barrels of oil and an unknown amount of natural gas but there has been no production yet. Chevron did not give details of reserves.

“As part of a continuous process of portfolio evaluation and business prioritisation, Chevron Nigeria Limited … has put forward its interests in two oil mining leases for auction,” a company spokesman said.

“The assets are located in the shallow waters.”

The planned sale follows several oil majors’ sale of assets onshore or in the shallow waters of the Niger Delta over the past few years.

Nigeria suffers from widespread oil theft and sometimes difficult relationships with local communities onshore; all these drive up the costs of operation within the Nigerian petroleum sector, while the long-delayed Petroleum Industry Bill (PIB) is still stuck in parliament.

Oil industry analysts believe that the slow pace of deliberation in the passage of the PIB amongst all these other factors, have added to a growing uncertainty in the country’s oil and gas industry.

Joint owners, Royal Dutch Shell, Italy's Eni and France's Total, have sold several oil blocks in the oil-bearing region, while eventual buyers of these included UK-listed firms Heritage Oil and Eland Oil.

Chinese-owned Addax has also said it was interested in buying more Nigerian oil assets in addition to what it has already.

Chevron's blocks are at the exploratory stage, unlike Shell's already producing fields, which will make valuations less straightforward, one banking source said.

Chevron owns a 40 per cent stake in 13 shallow water blocks with the Nigerian National Petroleum Corporation (NNPC) and also has several deep offshore assets.  Its 2012 net daily production in Nigeria averaged 238,000 barrels of crude oil and 165 million cubic feet of natural gas.

It is the third-largest oil producer in Nigeria and one of its largest investors, spending more than $3 billion annually. It operates under a joint-venture arrangement with NNPC and has assets on land, swamp and near-offshore concessions covering approximately 2.2 million acres (8,900 sq. km) in the Niger Delta region.

U.S. firm ConocoPhillips is also planning to sell its Nigerian businesses to Oando Energy for about $1.79 billion, the company said in December, but oil majors, which are looking more towards deep-water offshore, have said they cannot invest in large new projects in the country until the oil bill is passed.

Meanwhile, Shell has lifted a force majeure measure on liquefied natural gas exports from Bonny Island which was in place for almost a month, according to Upstream Newspapers online.

The force majeure, according to the report, was lifted on Monday, Shell Petroleum Development Company (SPDC) confirmed Tuesday
The measure was imposed on Nigeria Liquefied Natural Gas (NLNG) on May 15 after Shell halted its supplies to the Bonny Island facility over a reported leak.

SPDC said yesterday that the subsequent investigation had found the leak to have been caused by sabotage.

“Some 240,000 barrels of oil equivalent per day…was deferred over the shut-in period. SPDC has now repaired the line and resumed gas production,” it said.

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