With majors moving to sell out Nigeria assets, there is a trend of international oil companies (IOCs) exiting mature African basins and shifting to ‘frontiers like Guyana and Namibia’, according to S&P Global Commodity Insights.
Eni agreed to sell its entire upstream business to domestic producer, Oando. S&P said this is part of a larger shift for Nigeria, the African continent’s biggest oil producer. IOCs are looking to hand over their domestic assets to local firms.
Seplat seeks to take over ExxonMobil’s onshore business, but this has faced court challenges. According to a Reuters article, the sale, valued at US$1.28 billion, has awaited regulatory approval since 2022. In a May 2 report, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) told Reuters that the asset sale to Seplat could be approved in “less than two weeks.”
Equinor said in November that it entered into an agreement for sale of its Nigeria affiliate to Chappal Energies.
Shell said in January that it will sell its onshore Nigeria affiliate The Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance, a consortium of five companies comprising four exploration and production companies based in Nigeria and an international energy group.
TotalEnergies is also looking to exit the onshore oil business in Nigeria.
Theft and sabotage of their operations are among the issues pushing majors to sell Nigeria assets. Regulatory hurdles have delayed their exits. However, they are being offered fast-tracked approvals if they pay for oil spill cleanups, Reuters said in a May 3 report.
Guyana and Namibia are expected to be pivotal exploration hotspots in coming years. Major discoveries by Shell and TotalEnergies in 2022 kicked off Namibia’s exploration boom in the Orange Basin. This prompted comparisons to Guyana, where ExxonMobil has discovered over 11 billion oil-equivalent barrels. Majors have rushed to the area to grab up interests.
Most recently, Azule Energy (a BP/Eni joint venture) executed a farm-in agreement with Rhino Resources for interest in Block 2914A in the Orange Basin. The farm-in is Azule’s first such deal outside of Angola.
TotalEnergies won Block S4 offshore Guyana late last year, in a joint venture with QatarEnergy and Petronas. ExxonMobil leads a consortium, including Hess and CNOOC, that won Block S8 in Guyana, seeking to replicate their winning partnership at the Stabroek Block.
Chevron’s agreement to acquire Hess is driven by the smaller company’s 30% stake in the Stabroek Block, though Exxon and CNOOC have driven a wedge in that plan.
