Chevron plans to sell two Nigerian oil blocks

US oil and gas giant Chevron Corp said yesterday that it intends to sell the company's interests in two shallow-water oil mining leases in Nigeria in accordance with its business plan.

''As part of a continuous process of portfolio evaluation and business prioritisation, Chevron Nigeria Limited has put forward its interests in two oil mining leases for auction,'' a company spokesman told Reuters.

''The assets are located in the shallow waters,'' he added.

The leases for sale OML 83 and OML 85 are located near the southern coast in Nigeria's Bayelsa state in the prolific Niger delta region. The assets which are in exploratory stage contain approximately 200 million barrels of oil and an unknown amount of natural gas.

Chevron holds 40-per cent interest in the blocks with the majority 60-per cent held by state-owned Nigerian National Petroleum Corp (NNPC). Any transaction would require the approval of the Nigerian government.

The company has not provided more details of the divestment plan.

In recent months, other global oil giants including Royal Dutch Shell Plc, Total SA, and Eni SpA have been selling parts of their Nigerian assets amid continuing regulatory uncertainties and attacks on pipelines by armed gangs. New investments are also being held back by some of the oil companies.

In April, it was reported that US oil giant ConocoPhillips is close to selling its $1.8 billion of assets to Nigeria's Oando Plc, while Brazil's Petrobras is also looking to auction assets worth about $5 billion.

Nigeria's new petroleum industry bill, which envisages a complete overhaul of the existing regulations on dealing with oil revenues and foreign companies, is under discussion in the legislature. It is widely anticipated that further to its enactment, the profits of foreign oil giants operating in the country will decline sharply.

Nigeria, which produces over 2 million barrels of oil per day, earns 80 per cent of its revenue from the oil industry. But rampant corruption prevents it from being used in states to improve government services. 

San Ramon, California-based Chevron is the third-largest oil producer in Nigeria and one of its largest investors, spending more than $3 billion annually. In 2012, the company's Nigerian production averaged 238,000 barrels of crude oil a day and 165 million cubic feet of natural gas respectively.

Chevron's land and near-shore assets cover an area of approximately 8,900 sq.km in the prolific Niger delta region. Chevron owns a 40-per cent stake in 13 shallow water blocks with NNPC.

The company also has extensive interests in 10 deepwater oilfields where it holds interests ranging from 20 per cent, up to 100 per cent. The most prominent of them are the country's largest deepwater oilfield discovery Agbami and also the Usan project.