The exit of major oil firms from their joint ventures with the Nigerian government is already raising alarm bells and now it appears it will get worse with the French energy giant Total saying it too will exit from onshore oil fields in Nigeria.
TotalEnergies says it will put up for sale its minority stake in a Nigerian oil joint venture, joining the exodus of supermajors from onshore fields in Africa’s largest crude producer.
The quickening pace of divestment by the oil majors is sign Nigeria’s oil sector is being badly managed and comes at a time that the country is struggling to produce enough oil to meet its OPEC quota.
According to Bloomberg, the French energy giant will look to offload its 10% interest in a firm that holds 20 onshore and shallow water permits in the West African country, Chief Executive Patrick Pouyanne said on a conference call Thursday. Shell Plc, the operator of the licenses, is already considering bids from four local firms for its 30% shareholding in the company.
Read also: How Nigeria can reverse oil sector rot
Oil majors have been selling onshore and shallow water assets to Nigerian independent producers for more than a decade. That process is accelerating, with Exxon Mobil Corp. agreeing in February to sell some of its Nigerian assets to Seplat Energy Plc for at least $1.28 billion.
International firms want to focus on deep-water fields away from the difficulties of operating in close proximity with local communities. Total also operates four other onshore and shallow water licenses in Nigeria. “Disruption of local communities are sources of great concerns” in the country, TotalEnergies Chief Executive Officer Patrick Pouyanne said on conference call on Thursday.
The other shareholders in the joint venture are the state-owned Nigerian National Petroleum Co., which holds the majority stake, and Eni SpA, which has yet to reveal if it intends to sell its interest.
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