- Major oil firms are deserting Nigeria due to insecurity and vandalism of the pipelines which wreak havoc on the environment
- Many oil companies are leaving to safer havens like Sao Tome and Principe where they have obtained licenses to operate
- Nigeria said one the challenges facing it is the erosion of trust by major IOCs and that it working tediously to restore confidence in the oil sector
President Muhammadu Buhari approved the 100 per cent acquisition of the whole share capital of Mobil Oil Producing Nigeria Unlimited by Seplat energy Offshore Limited.
This was disclosed in a tweet by the Presidency. According to the tweet, Buhari authorised the acquisition in his capacity as Minister of Petroleum and is geared towards attracting foreign direct investment into the country.
The statement also gave directives to Exxon Mobil and Seplat to mitigate all environmental and abandonment liabilities.
Reasons oil companies are leaving
This comes as the Minister of State for Petroleum Resources, Timipre Sylva said the oil firms are leaving Nigeria due to the volatile environemt which impacts negatively on their operations.
PAY ATTENTION: Subscribe to Digital Talk newsletter to receive must-know business stories and succeed BIG!
Sylva stated that Nigeria’s situation had become dangerous because of the myriad of challenges affecting the oil sector.
He noted that while Nigeria is trying to attack the challenges, the destruction perpetrated by vandals was destroying investors’ confidence in the oil and gas industry.
According to the ex-Bayelsa state governor, Nigeria’s biggest problem is the insecurity of the pipelines, saying that there is a lot of pollution due to oil theft and pipeline vandalism which has put Nigeria in a tough situation.
Sylva said the oil firms feel that the industry is becoming very dangerous and a major polluter, saying that the vandals who rupture the pipelines set up unregulated illegal refineries and are seriously degrading the environment.
The minister stated that it is the goal of Nigeria to restore the country as a top oil producer in the world and tackle the menace of oil theft.
Where they have set up shops
According to reports, one of the major reasons the oil firms are also divesting from Nigeria is due to the loss suffered by vandalism and the global focus on renewable energy.
Nigeria only attracted $3 billion which is about 4 per cent of the $70 billion committed to new projects in Africa between 2015 and 2019.
According to The Nation, Chevron Texaco and ExxonMobil as well as EER, a Norwegian oil firm, have secured oil licenses in Sao Tome and Principe where they invested about $700 million.
List of oil companies leaving Nigeria
Royal Dutch Shell
Nigeria pays international oil companies $3.7 billion, owes $972 million
Legit.ng reported that Nigeria has paid international oil companies the sum of $3.7 billion as part of its cash call areas to five international oil firms with a total of $971.8 million still outstanding.
According to the Punch, data from Nigeria National Petroleum Company (NNPC) shows that the five international companies are Shell Petroleum Development Company, Mobile Producing Nigeria, Chevron Nigeria, Total Exploration and Production Nigeria, and Nigeria Agip Oil Company.
Reports say that Nigeria’s cash call areas to the companies stood initially at $4.689 billion prior to the reduction to the current amount of $971.8 million.