Petroleum Africa
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Wednesday, September 10, 2014
Shell is apparently looking to sell off more of its Nigerian assets. The company has decided to sell off another four oil fields as well as a pipeline that it co-owns with local buyers in the country. Over the past few years the company has sold a number of its onshore fields, with theft and sabotage of its facilities being at the root of the sales. Both theft and sabotage have been affecting the company’s bottom line for some time.
Shell is not the only major E&P firm said to be considering a fire sale in Nigeria; Chevron and Total are reportedly looking to exit the country due to never-ending oil spills and industrial sabotage and theft to the total of about 150,000 bpd.
The question is will the exodus of the majors hurt Nigeria’s production totals? Perhaps a few years ago that might have been the case, but Nigeria’s indigenous contingent has grown by leaps and bounds on the technical and operational end and are no longer just created to hold local content spots in consortiums. Seplat, Seven Energy, Sapetro, and Oando, to name a few, all have the expertise it takes to keep these onshore fields pumping away. As a matter of fact in just a few short years Seplat has taken itself from a newly created firm to one of the leading indigenous producers in Nigeria and it got its start with the acquisition of Shell assets.
The company started its rise in Nigeria when it came in as the top bidder for OMLs 4, 38 and 41, which were put up for auction by Shell and its partners Total and ENI. The company’s production has grown remarkably, rising from a gross operated oil production of 14,000 bpd since it took over the assets to its current daily crude oil production of around 60,000 bpd. The OMLs have a combined proven and probable reserve in excess of 500 million barrels of liquid hydrocarbon and gas reserves in excess of 1.6 Tcf.
For its part Seven Energy is another indigenous firm that will help maintain the production status quo in the Niger Delta, especially on the natural gas end. The company has focused on capitalizing the demand for gas and power in Nigeria. Through its gas processing, distribution and marketing subsidiary, Accugas Ltd., and its recent acquisition of the East Horizon pipeline, the company has to date invested approximately $1 billion in south-eastern Nigeria. This reinforces its position as a leading integrated gas company in Nigeria. Seven aims to capture the growing demand for gas and power as Nigeria’s industrial base grows and the liberalization of the power sector spurs further investment in generating capacity.
Whether Seplat, Seven, Oando, Sapetro or one of the many other home grown firms the country now has, the country’s indigenous contingent is more than capable of keeping the taps turned on onshore Nigeria.
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