Oil Majors Frustrated by Nigeria’s Asset Sale Delays

On March 4, 2024, 1:12 AM

Nigeria has yet to approve the sales of onshore assets announced in recent years by international oil majors, much to the frustration of both buyers and sellers who say that the slow progress continues to hamper the rebound in Nigeria’s oil production.   

Majors including ExxonMobil, Shell, Eni, and Equinor are still waiting for government clearance for their sales of oil assets, mostly to local companies. The buyers and Nigeria’s domestic oil producers expect the approvals to give clarity to the companies and revive oil production in the country.

Sellers and buyers see an “urgent need to conclude these transactions,” Osagie Okunbor, managing director of Shell Nigeria, said at a conference in Abuja, as carried by Bloomberg.

Shell announced in January that it would exit Nigeria’s onshore oil and gas industry but would remain a major investor in the country’s energy sector through its deepwater and Integrated Gas businesses.

U.S. supermajor ExxonMobil intends to sell its shallow water business in Nigeria to Seplat, the biggest Nigerian energy company by market value. The deal is still bogged down at the Nigerian regulator, although the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, told Reuters in October that the commission was “very optimistic” the $1.3-billion sale would move forward.

Last year, Italy’s Eni signed a deal with Nigeria’s energy company Oando PLC to sell Nigerian Agip Oil Company Ltd (NAOC Ltd), the wholly Eni-owned subsidiary focusing on onshore oil and gas exploration and production in Nigeria, as well as power generation. Eni continues to operate in the country, focusing on operated offshore activities.

But Eni’s deal also awaits regulatory clearance, as does one by Norway’s Equinor, which announced in November the sale of its Nigerian business to local firm Chappal Energies.

Approving the deals “remains the most realistic and successful avenue to bolster national crude oil production by the turn of the decade,” said Abdulrazaq Isa, chairman of Waltersmith Petroman Oil and head of the association of Nigerian producers, as quoted by Bloomberg. Waltersmith Petroman Oil is part of the Renaissance consortium of five companies buying the assets Shell is selling.