Chevron to Sell 40% Stake in Two Oil Blocks

Chevron Nigeria Limited (CNL) will be selling its 40 per cent stake in two Nigerian shallow water oil blocks in Oil Mining Leases (OMLs) 83 and 85. Chevron has 40 per cent interest in the two blocks.

The two blocks OML 83 and OML 85 hold an estimated 200 million barrels of oil and an unknown amount of natural gas but there has been no production yet. Chevron did not give details of reserves. The planned sale follows several oil majors’ sale of assets onshore or in the shallow waters of the Niger Delta over the past few years.

Oil industry analysts believe that the slow pace of deliberation in the passage of the PIB amongst all these other factors, have added to a growing uncertainty in the country’s oil and gas industry.

Joint owners, Royal Dutch Shell, Italy's Eni and France's Total, have sold several oil blocks in the oil-bearing region, while eventual buyers of these included UK-listed firms Heritage Oil and Eland Oil.

Chinese-owned Addax has also said it was interested in buying more Nigerian oil assets in addition to what it has already.

Chevron's blocks are at the exploratory stage, unlike Shell's already producing fields, which will make valuations less straightforward, one banking source said.

Chevron owns a 40 per cent stake in 13 shallow water blocks with the Nigerian National Petroleum Corporation (NNPC) and also has several deep offshore assets.  Its 2012 net daily production in Nigeria averaged 238,000 barrels of crude oil and 165 million cubic feet of natural gas.

It is the third-largest oil producer in Nigeria and one of its largest investors, spending more than $3 billion annually. It operates under a joint-venture arrangement with NNPC and has assets on land, swamp and near-offshore concessions covering approximately 2.2 million acres (8,900 sq. km) in the Niger Delta region.