Chevron shops for indigenous buyers for oil blocks

Nigerian unit of America’s oil major, Chevron Corporation, said it will prefer that indigenous operators acquired the two oil blocks it is divesting from located offshore Bayelsa in Nigeria’s oil-rich Niger Delta. Although, Chevron Nigeria Limited, CNL, did not give reasons for its preference, but it told Vanguard in an email response , Wednesday, that, “an indigenous company would be preferred.” The American oil major is toeing the lines of its Anglo-Dutch counterpart, Shell, which had divested a number of its onshore assets, which it sold at premium cost to indigenous consortiums with foreign technical partners.



 Chevron on Tuesday announced intentions to divest from two of its assets in Oil Mining Leases, OMLs 83 (Anyala Field) and 85 (Madu Field), located in the shallow waters of the Niger Delta. The oil blocks were discovered in 1993 by Texaco Incorporated, which later merged with Chevron, but could not be developed due to increasing costs, despite holding cumulative reserves estimated 250 million barrels of oil and 49 billion cubic feet per day. It is not clear if it was for the same reason that Chevron could not develop them. James Craig, media advisor for Africa and Latin America, Chevron, in an email to Rigzone, said the divestments were “part of a continuous process of portfolio evaluation and business prioritisation,” without given further explanations. Probed further, his Nigerian counterpart, Deji Haastrup, CNL’s General Manager, Policy, Government and Public Affairs, in the email to Vanguard also said, “This is part of our continuous evaluation of opportunities and the need to prioritise our portfolio.” He added, “We are a big company with a large asset base. We believe there are smaller companies who would find these assets a perfect fit for their business profile and portfolio.” Asset disposal With regard to how the oil blocks will be disposed of Craig had said the assets would be “auctioned”, and “All information pertaining to the assets are available in the data room specifically created for the purpose.” Haastrup maintained that “The entire process has been transparent and in line with appropriate laws and regulations,” even as the Nigerian National Petroleum Corporation, NNPC, Tuesday, denied any knowledge of the oil major’s divestment.

Chevron “will not comment on this at this time” on whether it already had buyers for the assets, and if operating rights will be handed to the National Petroleum Development Company, the production arm of the NNPC, as was the case with the Shell oil block. Relinquishment process Section 9 subsection 2 (4) of the Petroleum Act 1969, stipulates that for a lease holder to relinquish an asset, “… the licensee shall obtain the prior agreement of the Director of Petroleum Resources as to the shape and area of the retained part before an application for the relinquishment or surrender is made to the minister.” But the Department of Petroleum Resources, DPR, refused to confirm or comment on it. Subsection 4 (B) also states: “An application for the assignment or takeover of an oil prospecting or oil mining lease (or an interest in the same) shall be made to the Minister in writing and accompanied by the prescribed fees at the discretion of the minister, and the applicant shall furnish in respect of the assignment, or takeover, all such information as is required to be furnished in the case of the applicant for a new license or lease.” Chevron holds a 40-percent stake in the oil blocks under a joint venture with the NNPC. The company operates and holds a 40 percent interest in 13 concessions, predominantly in the onshore and near-offshore regions of the Niger Delta. The concessions cover about 2.2 million acres and are operated under a joint-venture arrangement with the NNPC, which owns a 60 percent stake.
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