Nigeria to lose oil revenue to Angola, Ghana

Coordinating Minister for the economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala

There are indications that many international oil companies are considering leaving their Nigerian assets for those in Angola, Ghana and some other African countries where they feel the business environment is more predictable and friendly, an investigation has shown.

A top official of one of the IOCs told our correspondent in Lagos on Friday that it now made more economic sense to do business in other African countries than Nigeria.

According to him, there are too many vested interests in the Nigerian oil and gas sector, some of which are diverse, and conflicting.

He said, “We are divesting from Nigeria to countries like Angola and Ghana because it now makes more economic sense to do business there.”

He said the situation in the country had gone so bad that some players, which could not break even, had resorted to cutting corners.

A French oil group, Total, recently announced the sale of its 20 per cent stake in a Nigerian offshore bloc to China’s Sinopec for $2.5bn.

The OML 138 bloc, which includes the Usan oil well already in production since February, is co-owned by the United States groups, Chevron and ExxonMobil, and a Canadian company, Nexen.

In September, Total also announced an asset sale programme worth $20bn to be carried out between 2012 and 2014. With the Nigerian divestment, Total has so far raised $7.5bn.

“The transaction is aligned with Total’s active portfolio management,” the President, Upstream at Total, Yves-Louis Darricarrere, had said then.

“Usan accounts for less than 10 per cent of the group’s equity production in Nigeria. This sale of an asset operated from a minority position will allow us to focus our resources on the material growth opportunities in Total’s portfolio,” he said.

Shell Petroleum Development Company of Nigeria Limited, a subsidiary of Royal Dutch Shell Plc, had also handed over oil mining lease (OML) 40 to Elcrest Exploration and Production Nigeria Limited.

The deal, which was completed on August 31, 2012, led to the assignment of its 30 per cent interest in OML 40 in the Niger Delta to Elcrest Exploration and Production Nigeria Limited. Total cash proceeds for SPDC amounted to some $102m.

But the Chair, Shell Nigeria, Mr. Mutiu Sunmonu, said, “We are not leaving the Western Niger Delta because of insecurity or environmental issues. We are also not leaving Nigeria.

“I have continued to stress the point that the divestment of our equity from some oil blocks in the Niger Delta is a strategic refocusing of our portfolio.”

This year, the NNPC had confirmed moves by the United States’ oil major, ConocoPhillips, to sell its onshore and offshore oil and gas fields in Nigeria.

But, it said contrary to media reports, the US firm would retain its interest in the multi-billion dollar Brass Liquefied Natural Gas project.

It was said that the divestment decision was as a result of global re-organisation of the ConocoPhillips Group.

A former Group Managing Director of the Nigerian National Petroleum Corporation, Mr. Funsho Kupolokun, said that continuous divestment by IOCs was not a good sign for the country.

Kupokun, who spoke at a stakeholders’ forum organised for oil and gas players by KPMG, called for more constructive engagement among stakeholders, given the challenges before the nation.