A wave of planned sales of onshore Nigerian assets by oil majors has prompted speculation that they are finally leaving the Niger Delta because of oil theft, gangsterism and political uncertainty. In reality, though, foreign firms such as Royal Dutch Shell , Chevron, Eni and Total are here to stay, industry sources say. The majors are likely to sell only small blocks that are not worth their while — those assets worst affected by theft and sabotage or fields that risk expropriation in a government push to promote local ownership. Meanwhile, the large oil producing blocks, huge gas deposits, key pipelines and the export terminals that control the passage of onshore oil to international markets will most likely stay in their hands — enabling them to retain infrastructure for which they can charge rent to other users.
Complaints by oil majors that Nigeria has done little to combat oil theft or end uncertainty over changes to the fiscal regime by passing the Petroleum Industry Bill (PIB) are genuine, but they won’t drive the firms away from the country. “Nigeria’s ‘difficult’ operating environment, security concerns and the non-passage of the PIB all provide useful cover for what may essentially be a portfolio optimisation process,” said Razia Khan, Head of Africa Research at Standard Chartered. The global shale oil and gas boom means there are more exploration opportunities, so it makes financial sense to keep only the most profitable businesses in Nigeria, like gas for LNG export, and expand deep offshore where there is no oil theft. If anything, they will use their grievances as leverage in negotiations with government over licenses and taxes.