Chevron Seeks to Reduce Nigerian Presence with Sale of Oil Blocks

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Ejiofor Alike with agency reports

The international oil companies (IOCs) operating in the country may have continued the wave of divestments of their oil and gas assets as Chevron is said to be seeking to sell several Nigerian oilfields as part of a global drive to reshape its portfolio as it focuses on growing its US shale output.

At the peak of the divestments of the oil and gas assets by the oil majors four years ago, Chevron had sold Oil Mining Leases (OMLs) 52, 53 and 55 to Nigerian independent companies.

The energy giant had also offered OML 82, and 85, in a separate bidding process.
The US oil major had also put on offer its 40 per cent stake OMLs 86 and 88, both located in shallow waters off Bayelsa State, bringing to seven the number of oil blocks offered for sale by Chevron since 2013.

However, many of these transactions were mired in dispute, which ended at the Supreme Court before the issues were resolved.
Quoting unnamed banking and oil industry sources, Reuters reported that Chevron is seeking to sell several Nigerian oilfields to focus on growing its US shale output.
The discussions are being held directly with potential buyers and Chevron is not planning to launch a tender process for the assets at this stage, two of the sources reportedly said.

Chevron was said to be turning to joint ventures and drilling alliances in its bid to dominate the US Permian Basin after abandoning a takeover that would have made it the leading producer in the world’s biggest shale field.
The company was reportedly in a race with ExxonMobil to be the first to pump a million barrels of shale oil per day from the field in the US southwest, using a strategy that depends on a host of partners sharing their expertise and their output.

With its focus on Shale production, Chevron joined ExxonMobil and Royal Dutch Shell in a drive by foreign oil companies to reduce their footprint in Nigeria, which has been mired in political and security instability in recent years.

The San Ramon, California-based company, Nigeria’s third largest oil producer, is looking for buyers for a number of its onshore and shallow offshore fields, where indigenous producers have expanded their presence.
Chevron did not respond to a request for comment.

According to the company’s report, it operates and holds a 40 per cent interest in eight concessions in the onshore and near-onshore regions of the Niger Delta under a joint-venture arrangement with the NNPC.
Chevron also does business through other subsidiaries in Nigeria.

In 2018, its net daily production in Nigeria averaged 194,000 barrels of crude oil, 233 million cubic feet of natural gas and 6,000 barrels of liquefied petroleum gas (LPG).
In the deepwater, Chevron has interests, ranging from 20 to 100 per cent, in three operated and six non-operated deepwater oil blocks in Nigeria.

Chevron operates the Agbami Field, and also has a 67.3 per cent interest in the field, which produced an average of 108,000 barrels of crude oil and 12 million cubic feet of natural gas daily in 2018.

It also has a 30 per-cent non-operated working interest in the Usan field, which produced an average of 20,000 barrels of crude oil and 4 million cubic feet of natural gas in 2018. It has a 55 per cent interest in OMLs 140 and 132.