The United States oil company, Chevron Corporation, has netted $70 million from the sale of two offshore oil blocks in Nigeria; Oil Mining Lease (OML) 83 and OML 85, two years after it had put them up for sale.
The oil firm confirmed in a statement the completion of the sale of its 40 per cent stake in the two Nigerian offshore oil blocks, which it started in 2013.
Reuters, which reported this, added that the oil company completed the sale to local firm, First Exploration & Petroleum Development Company Limited, chaired by former Minister of Petroleum Resources, Odein Ajumogobia.
The two blocks, OML 83 and OML 85, hold an estimated 200 million barrels of oil and an unknown amount of natural gas, but there has been no production yet, two industry sources told Reuters.
Chevron did not give details of reserves. Spokesperson for the company’s subsidiary in Nigeria, Chevron Nigeria Limited (CNL), Deji Haastrup, could not be reached on phone for comment on Thursday.
However, a source close to the deals, told our correspondent that the company’s “revenue base could receive a boost of about $70 million from the sale of the blocks located in shallow waters offshore Bayelsa State.”
“The company’s subsidiary is not likely to disclose the revenues accruable from the sale without getting a clearance from its headquarters in the United States (US), but one thing we are sure of is that the First E&P cough up about $70 million for this transaction.”
According to Chevron, approximately 45 per cent of discovered resources is gas in OML 85. “As part of a continuous process of portfolio evaluation and business prioritisation, Chevron Nigeria Limited has put forward its interests in two oil mining leases for auction,” a company spokesman said.
“The assets are located in the shallow waters.” Chevron owns a 40 per cent stake in 13 shallow water blocks with Nigerian National Petroleum Corporation (NNPC) and also has several deep offshore assets.
Its 2012 net daily production in Nigeria averaged 238,000 barrels of crude oil and 165 million cubic feet of natural gas.
Several oil majors have sold assets onshore or in the shallow waters of the Niger Delta over the past few years.
Nigeria suffers from widespread oil theft and, at times, difficult relationships with local communities onshore, driving up the costs of operating there, while a long-delayed energy bill is stuck in parliament, adding to industry uncertainty.
Joint owners, Royal Dutch Shell, Italy’s Eni and France’s Total, have sold several blocks. Buyers of these included UK-listed firms, Heritage Oil and Eland Oil. Chinese-owned Addax has said it is interested in buying more Nigerian assets.
Chevron’s blocks are at the exploratory stage, unlike Shell’s already producing fields, which will make valuations less straightforward, one banking source said.
US firm, ConocoPhillips is also planning to sell its Nigerian businesses to Oando Energy for about $1.79 billion, the company said in December.
Oil majors, which are looking more towards deepwater offshore, said they could not invest in large new projects until the Petroleum Industry Bill (PIB) is passed.
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