Crude oil theft: As IOCs depart, indigenous oil firms increase assets
Joseph Irikefe
Nigeria’s troubled oil and gas industry has been offered a lifeline with domestic oil companies daily snapping-up onshore oil blocks that are being abandoned by exiting International Oil Companies, (IOCs).
Faced with several lingering challenges, especially the menace of insecurity, crude oil theft, entrenched hostilities in host communities and the rise in advocacy for the reduction in carbon emission, many international oil companies operating in the country have in the last 15 years, moved offshore, or have out-rightly left Nigeria for economic-friendly oil producing nations like Angola, Guyana, Greenland, Costa Rica and Ghana.
The IOCs that have reportedly divested from their onshore oil blocks or in the process of doing so include the five majors, namely Shell, Eni, ExxonMobil, Total and ConocoPhillips. For instance, the IOC with the largest stake in the Nigerian oil and gas industry, Shell, divested from four onshore oil blocks in 2010.
The successful sales of these oil assets by Shell triggered a wave of sales by other IOCs. By the end of 2015, a total of 24 oil blocks had been sold to local oil firms, with the exception of one block sold to Chinese oil giant, Sinopec.
In 2022, Shell also announced that it received four offers for its entire onshore oil and gas portfolio worth US$3 billion it had earlier put up for sale.
According to Shell, it is selling its entire shareholding in the Shell Petroleum Development Company of Nigeria Limited to Renaissance, a consortium consisting of ND Western Ltd, Aradel Holdings Plc, Petrolin Group, FIRST Exploration and Petroleum Development Company Ltd and the Waltersmith Group.
According to reports, due diligence dialogue between representatives of Renaissance and NUPRC is expected to end by June ending.
In the same vein, Total and ConocoPhillips are divesting and selling onshore assets worth $27.5 billion to Nigerian firms. Also, American oil giant, ExxonMobil, agreed to sell the entire share capital of its shallow water operations in Nigeria to Seplat Energy for an initial US$1.3billion, and added fees of up to another $1billion.
Other IOCs, including Chevron, have also put some of their oil blocks for sale. From 2021till now, the worth of oil assets put on sale by the IOCs is over N20.8 trillion.
The trend, meanwhile, is expected to continue, as the top five IOCs and other big industry players like Nigeria Agip Oil Company and Equinor have began the process of divesting their investments in 26 oil blocks in Nigeria to indigenous firms.
Owing to the continued divestments and other factors, Nigeria’s oil production crashed from its highest peak of 2.469 million barrels per day recorded on December 31, 2005, to 1.3 million bpd (excluding condensates) at the end of May 2023.