ExxonMobil divests from Nigeria

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…puts on sale oil and gas fields worth $3bn

Chibisi Ohakah, Abuja

The oil and gas industry in Nigeria was rattled yesterday as world largest oil exploration company by market value, ExxonMobil, confirmed its divesting from Nigeria.

Reuters reported that officials of the group have held talks with a number of Nigeria oil companies on the sale of a suite of oil and gas fields in Nigeria, and that the company intends “to focus on new developments in U.S. shale and Guyana, industry and banking.”

According to the report, potential disposals are expected to include stakes in onshore and offshore fields and could raise up to $3 billion for the company. “Exxon is actively divesting in Nigeria,” Reuters quoted a source who was briefed on the divestment plans.

The report said Exxon officials have held talks in recent weeks with several Nigerian companies to gauge their interest in the fields.

One source said Exxon was soon due to open a “data room” – which would provide technical information on the fields, such as seismic and production details – in Nigeria.

The discussions focused on a number of onshore fields Exxon shares in joint ventures with the Nigerian National Petroleum Corporation NNPC, including oil mining leases 66, 68, 70 and 104, one source said. Exxon’s share of oil production in those fields reached 120,000 bpd in 2017, the last year for which data was available. Exxon is also weighing the possible sale of stakes in offshore fields in Nigeria, two sources said.

It will be recalled that in October 2016, ExxonMobil quit Nigeria’s downstream oil sector, divesting its 60% stake in Mobil Oil Nigeria. In a statement circulated then, the company, which had a market value of $460 billion said it made business sense to quit the downstream oil sector at that time.

“Following these assessments, we sometimes find that it makes greater business sense to divest when the businesses are estimated to have higher value to others,” ExxonMobil said then in the statement. The company went on to say that the decision to quit then was in no way related “a reflection of our view on the local business climate, financial results or the workforce”.

The 60% stake in Mobil Nigeria Plc relinquished by ExxonMobil was then acquired by Nipco Plc., an indigenous downstream oil and gas company. Managing director of Nipco, Venkataraman Venkatapathy, said the acquisition was part of Nipco’s strategic move to support the company’s continuous growth and expansion of its Nigerian retail footprint.

With a revenue stream of $246,204 billion, ExxonMobil, founded by John D. Rockefeller, one of the world’s richest men of all time, is the second biggest company in the world – just after Walmart and before Apple on Fortune 500 list.

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