International Oil Companies Scale Down On Nigeria Operations

Proshare

Wednesday, November 06, 2019 /01:33PM / By CSL Research / Header Image Credit: The Guardian

 

In a recent publication, Reuters reported that Chevron- Nigeria's third largest oil producer is looking to sell-off a number of its oil assets in the country as the company wants to focus on growing its US shale output. This is in line with moves by the company's top rivals, Exxon Mobil and Shell, to dispose of some of their Nigerian oilfields. Over the years, the oil companies have reduced their stakes in the Nigerian oil industry amidst political instability, the uncertain security situation in the Niger-Delta, the impasse on the Petroleum Industry Bill (PIB), human and environmental right controversies, just to mention a few.

 

The country's oil industry suffered a major setback as the global price of oil nose-dived in 2014. This resulted in leaner profit margins for international oil companies (IOCs), causing a steep drop in upstream spending by IOCs in the sector. The downbeat outlook on the price of oil has continued to weigh on IOCs interest in the sector making it difficult for Nigeria to launch large offshore oil developments to ramp up the local production. The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari noted that the country intends to increase production to 3mbpd within the next two or three years.

 

Proshare Nigeria Pvt. Ltd.

 

New investments are crucial in securing Nigeria's future oil production, as such, the country has brought to the fore once again its plans for restructuring the industry by pushing for the passage of the PIB. Senate President, Ahmed Lawan, disclosed that the PIB will be passed before the end of 2020. The Petroleum Industry Bill (PIB) was first introduced to the National Assembly in December 2008. Drafts of the bill, however, became very contentious due to objections from the international oil companies (IOCs) and the Nigerian National Petroleum Corporation (NNPC). Consequently, the bill was never passed into law.

 

In our opinion, the move by IOCs to downscale their stakes in Nigeria's oil and gas industry bodes well for indigenous businesses who have gradually expanded their footprints in the most strategic sector of the economy. From a macroeconomic standpoint, we believe the implementation of indigenisation policy in the oil industry will ease capital repatriation pressure and its attendant impact on the local currency.

 


Proshare Nigeria Pvt. Ltd.



Related News

  1. The Bulls Are Back As Oil Heads Towards $60
  2. Nigerian Lawmakers Vote to Increase Deepwater Royalties
  3. Saudi Arabian CMA Announces the Approval of The IPO of The Saudi Arabian Oil Company's Shares
  4. Oil Markets: A Rare Bullish Bounce In Oil Markets
  5. FG Urged to Pay Greater Attention to Oil Producing Communities
  6. Is OPEC Doing Enough To Counter The Looming Oil Glut? - OIR 291019
  7. Axxela Rated BBB plus Long-Term (NG), A2 Short-Term (NG)- GCR; Outlook Stable
  8. Oil Markets: Oil Bulls Broken By Economic Fears - OIR 251019
  9. OPEC Raises Nigeria's Oil Production Quota by 80,000bpd
  10. Oil Rebounds On Rare Market Optimism - OIR 221019
  11. OPEC Faces Critical Decision As Oil Drops Again - OIR 181019
  12. Average Prices Of PMS, AGO, HHK and Cooking Gas - September 2019
  13. Oil Markets Bearish Despite Rising Geopolitical Risk - OIR 151019
  14. A Long-Term Crisis Looms For Oil
  15. Oil Prices Rise On Trade War Optimism And Tanker Attack - OIR 111019
  16. Border Closures May Only Offer Temporary Subsidy Reprieve
  17. Energy Analyst Offers Insight Into Why President Buhari Will Not Sign The PIGB
  18. Passage of the PIGB …taking a step away from how NOT to run an oil industry"
  19. Petroleum Industry Bill - Senate To Receive Final Report on PIGB April 25

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
READ MORE:
Related News
SCROLL TO TOP