FG Addresses Alleged Plan of Chevron, Exxon Mobil, Others to Leave Nigeria

FG Addresses Alleged Plan of Chevron, Exxon Mobil, Others to Leave Nigeria

  • FG said that international oil corporations are not leaving the country, instead, they are expanding their investment portfolio
  • Nigeria's Minister of State for Petroleum Resources said that divestments are beneficial to the companies and Nigeria
  • Compared to other countries, he cited that Nigeria has an abysmal capital investment-to-reserve ratio of 5%

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The federal government has stated that international oil corporations (IOCs) are expanding their investments and portfolio deep offshore, not departing the country.

International oil companies
FG Addresses Reported Plan for Chevron, Exxon Mobil, Others to Leave Nigeria
Source: Getty Images

Heineken Lokpobiri, Nigeria's Minister of State for Petroleum Resources (Oil), revealed this during the 7th Nigeria International Energy Summit (NIES 2024) opening ceremony, which took place on Tuesday at the presidential banquet hall in Abuja.

Lokpobiri said:

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“I want to use this opportunity to assure everyone that no IOC is leaving Nigeria. They are only going deep offshore.”

IOCs in Nigeria

In Nigeria's upstream oil business, over 100 corporations operate through various subsidiaries, but the five major integrated companies (IOCs) - Shell, Chevron, Total, Eni (AGIP), and Exxon-Mobil - collectively hold around 75% of the country's hydrocarbon output, according to a Bayelsa Commission report.

Notably, Shell recently announced a plan to sell its Nigerian onshore oil and gas division for up to $2.4 billion to a group of five primarily local businesses.

Divestment is win-win

According to a Premium Times report, the minister pointed out that some foreign oil companies' divestitures benefit both parties since they are increasing their investments in deep offshore, which frees up space for local businesses to expand their operations in onshore and shallow sea areas.

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He said:

“It is imperative to note that we are strategically managing the divestment processes. Our commitment to enhancing our crude oil reserves and production is unwavering, and we are actively exploring innovative solutions to attract investment, optimize operations, and foster sustainable growth. We are open for business and ready to welcome your investments.”

Towards greener energy source

According to Lokpobiri, moving toward greener and more sustainable energy sources is necessary.

He said:

“We are actively pursuing initiatives to position Nigeria as a leader in this energy transition. As we navigate this change, Nigeria recognizes the need to strike a balance between meeting our growing energy demand and reducing our carbon footprint.
“The diversification of our energy mix, investments in renewable energy, and the adoption of cleaner technologies are all integral components of our strategy.”

According to him, Nigeria's investments fell by 69% between 2017 and 2022 compared to the global average decline of 28% in the oil and gas business for the same period.

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He supported this claim by stating that the capital investment to reserve ratio illustrates the amount of capital allocated to a nation's accessible reserves.

In comparison to Angola (46%), Brazil (115%), Mozambique (92%) and Guyana (617%), he pointed out that Nigeria has an abysmal capital investment-to-reserve ratio of 5%.

The minister added that there is a rapidly closing window of opportunity for luring in fresh capital and investigating the enormous reserves. According to him, if the global energy revolution quickens, over 60% of Nigeria's reserves would become unprofitable to produce.

He added:

“Against this backdrop, we have identified that there are so many licenses with proven reserves that are not being optimized in the hands of IOCs, NOC, and others. In line with Mr. President’s Renewed Hope agenda, we are working on changing this narrative."

Shell breaks silence on reported plans to leave Nigeria

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Legit.ng reported Shell Petroleum Development Company of Nigeria has reacted to its rumoured plan to leave Nigeria after selling its onshore business.

Legit.ng reported that Shell announced it had reached an agreement with Renaissance Africa Energy to take over its oil business in Niger Delta.

The announcement triggered reactions on various social media platforms, with many Nigerians expressing the opinion that Shell was leaving the country after active service since 1937.

Source: Legit.ng

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