Total Confirms Sale of Some Nigerian Assets

12 Nov 2012

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Total CEO, Christophe de Margerie

The Chief Executive of French oil major Total has confirmed that the firm was in talks to sell its assets in Nigeria, worth about $2.4 billion, to China's Sinopec, Reuters has reported.

A report last week said Asia's largest refiner China's Sinopec was close to buying stakes in Nigerian onshore oil blocks from Total.

“Yes we are discussing with certain buyers about selling certain assets in Nigeria,” said Total CEO, Christophe de Margerie, declining to name the potential buyer or value of the deal but saying he would not deny the report.

“But it doesn't mean we are scared and intend to start some kind of walk out of Nigeria...Total is happy to develop its projects in Nigeria,” he told reporters at an energy conference in Abu Dhabi.

Nigeria is Africa's largest crude oil exporter and oil companies operating there have long had to deal with attacks on their pipelines and staff, with the country's worst floods in 50 years seriously affecting their output in recent weeks.

The French group said in September it planned to sell assets worth between $15 billion and $20 billion in the period up to 2014 as part of a bolder approach to managing its business, which has seen it buy and sell assets more frequently.

Total declared force majeure in mid-October on gas supplies to the Nigerian Liquefied Natural Gas’ (NLNG) liquefaction plant, saying it had stopped oil and gas production from Oil Mining Lease (OML) 58, which was losing 90,000 barrels per day (bpd) of oil equivalent, in which it has a 40-per-cent stake.

Total's head of upstream told reporters at the same press conference in Abu Dhabi that it was still too early to say when production might restart, with flooding still posing problems.

“The water is decreasing, but we still have some problems with the floods,” Yves-Loius Darricare, Total's head of upstream, said. “I hope we will be able to restart production as soon as we can.”

At least 363 people have been killed due to the floods since the start of July while 2.1 million people have been displaced, according to the National Emergency Management Agency (NEMA).

NEMA said last week the oil-producing Niger Delta region was still flooded but water levels were falling and the heaviest rains had passed as Nigeria enters its six-month long dry season.

Meanwhile, the Shell Petroleum Development Company (SPDC) yesterday also confirmed that it shut its Imo River oil pipeline on October 31 due to damage caused by thieves and deferred 25,000 bpd of production.

This latest outage will add to a growing list of production problems for Africa's biggest oil exporter.

Nigeria's worst flooding in 50 years contributed to Shell and Eni declaring force majeure on major crude oil grades in recent weeks. This means they cannot keep to contract agreements due to problems out of the company's control.
US oil major Exxon said on Saturday it had shut a pipeline off the coast of Akwa Ibom State after an oil leak but it didn't say what the cause of the spill was or how much output was affected.

“(Shell) shut down the Imo River Trunkline in its eastern operations after it found several crude theft points on the facility,” an emailed statement from Shell's Nigerian arm said.

“Some six crude theft points have so far been confirmed on the 12-inch trunk line, of which three have been repaired.”

Shell said two crude oil theft valves had also been attached to its Trans-Niger Pipeline yesterday but these had been closed off and the pipeline was being reopened.
Shell said there had been 26 spills in the Imo River area so far this year alone, spilling 3,000 barrels of oil.

Tags: News, Featured, Nigeria, Christophe de Margerie, Total

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