Shell and Chevron have joined Exxonmobil in asset acquisition in Egypt even as they reduce their level of activities in Nigeria on account of government failure to be proactive in attracting investments in flow into the oil and gas industry.
Just this week, Egypt said that it awarded oil and gas exploration concessions in the Red Sea to Chevron, Royal Dutch Shell and Mubadala in an international tender.
After unveiling plans to divest some of its assets in Nigeria last year, Chevron, Exxon Mobil and Shell have acquired oil and gas resources in Egypt.
Chevron was awarded the first block, Shell a second block, and a third block was awarded jointly to Shell and Mubadala with a total exploration area of around 10,000 square km ( 3,860 square miles) and with a minimum investment of $326 million, the petroleum ministry stated. Exxon Mobil has acquired oil and gas resources, spreading across more than 1.7 million acres, located off the coast of Egypt.
Of the total acquired resources, 1.2 million acres are in the North Marakia offshore block, while 543,000 acres are situated in the North East El Amriya Offshore block.
In both the blocks, the leading integrated energy player will have operating interests of 100 percent. The company expects operations to commence in 2020. Notably, the takeover of seismic data is part of Exxonmobil’s operations.
Nigeria has the second largest oil reserve in Africa after Libya yet smaller countries that have fewer reserves have been able to attract investments into their oil and gas sector. This is part of Nigeria’s many failings in positioning itself as an investment destination being laid bare yet again.
For Nigeria, losing one of its FDIS to Egypt is a big blow given the amount of capital the former needs at a time of weak economic growth.
Nigeria lost out to Egypt in 2018 with the latter emerging the biggest destination of foreign direct investment according to data by UNCTAD.
With $ 7 billion in FDI, Egypt got more than double the $3 billion investment Nigeria attracted despite being smaller in terms of population and economic size.
American multinational oil and gas corporation joined the league of multinational oil companies divesting from Nigeria assets
According to sources, Exxonmobil is weighing the possibility of selling its stakes in Oil Mining Leases ( OML) 66, 68, 70 and 104 with a total production capacity of 120,000 bpd as at 2017 which might provide an opportunity for indigenous companies who have in the past purchase billion worth of assets from firms such as Eni, Shell, Chevron and Total in the past five years.