Nigeria's oil minister urges local firms to seize opportunities from IOC sales

Alison-Madueke

Nigeria's indigenous oil companies have an opportunity to become major players in the country's upstream by acquiring assets being sold off by foreign oil companies, oil minister Diezani Alison-Madueke said Wednesday.
Indigenous producers currently account for just 10% of Nigeria's roughly 2 million b/d of oil output, while foreign companies such as Shell, Eni, Total and Chevron account for 90%. But the latter have been selling off some of their assets, mainly in the onshore Niger Delta area, due largely to security issues.
"Let me allay fears that the spate of divestment will not lead to crisis in the nation's oil and gas industry, rather indigenous Nigerian companies have been presented with the opportunity to develop local operatorship capacity as well as boost local production and consequently grow into major upstream players," Alison-Madueke said in a statement from her office.
The minister cited the case of state-owned Nigerian Petroleum Development Co. (NPDC), the E&P arm of the Nigerian National Petroleum Corp., which she said had grown oil production from 60,000 b/d in 2007 to over 140,000 b/d after taking over majority stakes in eight oil blocks sold by Shell, Eni and Total between 2010 and 2012.
According to Alison-Madueke, with plans to acquire more of the assets put up for sale by the foreign oil majors, NPDC could grow its output to 250,000 b/d in the medium term.
Currently, local Nigerian companies own more than 100 blocks across Nigeria's oil-producing regions and at least 30 marginal fields, numbers that are likely double over the next few years, according to analysts.
Already, several companies have been pre-qualified to compete for the 45 percent stakes held by Shell, Total and Eni in four oil blocks, OMLs 24, 25 18 and 29.
They include Nigerian conglomerate Dangote, energy trading company Talevras, the Swiss/Nigerian joint venture Aiteo IS45 and Seplat, which is 45 percent owned by France's Maurel & Prom.
Seplat is finalizing its deal to buy Chevron's stakes in OML 53, 53 and 55, having outbid Nigeria's Brittania-U for the blocks.
Alison-Madueke stressed however that these divestments by the oil majors do not augur a mass IOC exit from Nigeria but rather represent a shift in focus from the onshore to the more challenging frontiers of the deep offshore.
"The IOCs remain very much present in Nigeria. Shell still retains ownership of 34 onshore blocks while Total, ExxonMobil, and Chevron are still committing large amounts of capital to assets offshore Nigeria," she said.