French oil company, Total sells stake in Nigerian offshore block to Sinopec for $2.5 Billion

November 20, 2012

Africa, International

French oil company, Total sells stake in Nigerian offshore block to Sinopec for $2.5 Billion

By Roseline Okere
The Guardian (Nigeria)

French oil company, Total SA, has divested its 20 per cent interest in OML 138 block to a wholly owned subsidiary of China Petrochemical Corporation (Sinopec), for approximately $2.5 billion (N400 billion) in cash, subject to approval by the Federal Government.

The OML 138 block contains the Usan field, which started production in February 2012. The Nigerian National Petroleum Corporation (NNPC) is the OML 138 concession holder. Other partners include Chevron Petroleum Nigeria Ltd. (30 per cent), Esso E&P Nigeria (Offshore East) Limited (30 per cent) and Nexen Petroleum Nigeria Ltd. (20 per cent).

Total, which made this disclosure yesterday in a statement, said that the sale matched its plans to raise fund for new investment.

President of Upstream at Total, Yves-Louis Darricarrère, said that the transaction was aligned with Total’s active portfolio management. “Usan accounts for less than 10 per cent of the group’s equity production in Nigeria. This sale of an asset operated from a minority position will allow us to focus our resources on the material growth opportunities in Total’s portfolio,” he said.

He noted that 2012 marked 50 years of Total’s presence in Nigeria, adding that its production in Nigeria was at 287,000 barrels of oil equivalent per day in 2011.

It disclosed: “Deepwater developments are one of Total’s main growth avenues in Nigeria, where the group operates the Akpo field in OML 130 and is also preparing to develop the Egina field in the same lease. Offshore production also comes from OMLs 99, 100 and 102, which are operated by the group as part of a joint venture with NNPC.

“The main fields in these leases are Amenam-Kpono, Edikan and Ofon. Total recently commenced the second phase of the Ofon development, which is mostly intended to recover natural gas reserves. Ofon phase two is a step forward in the group’s plan to reduce its gas flaring and greenhouse gas emissions.

“Total’s onshore production comes from OML 58, which it also operates as part of its joint-venture with NNPC.”

Total disclosed that a project was underway to increase the lease’s natural gas and condensate production capacity to supply the domestic market.

It added that Total had significant equity production in Nigeria from its interests in non-operated ventures, particularly the NNPC/SPDC joint venture (10 per cent) and SNEPCO operated PSC (12.5 per cent), which includes the Bonga field. Total also has a 15 per cent interest in Nigeria LNG, whose liquefied natural gas production capacity was increased to 21.9 million metric tons per year when train six was brought on stream in late 2007.

“Total deploys an assertive local content policy, with locally worked hours accounting for 60 per cent and 90 per cent respectively for Usan and OML 58 projects in Nigeria. We are also helping Nigerian contractors to build deepwater expertise, especially in the Niger Delta, a region that is home to more than half of Total’s Nigerian employees and most of its operations in the country,” it said.

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OML 138 block

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Nigerian National Petroleum Corporation
NNPC was established on April 1, 1977 as a merger of the Nigerian National Oil Corporation and the Federal Ministry of Mines and Steel. NNPC by law manages the joint venture between the Nigerian federal government and a number of foreign multinational corporations, which include Royal Dutch Shell (headquarters The Hague, Netherlands) , Agip (Headquarters Rome, Milan, Italy), ExxonMobil (Headquarters Irving, Texas, United States), Chevron (Headquarters San Ramon, California, United States).

In addition to its exploration activities, the Corporation was given powers and operational interests in refining, petrochemicals and products transportation as well as marketing. Between 1978 and 1989, NNPC constructed refineries in Warri, Kaduna and Port Harcourt and took over the 35,000-barrel Shell Refinery established in Port Harcourt in 1965.

In 1988, the NNPC was commercialised into 12 strategic business units, covering the entire spectrum of oil industry operations: exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments.

NNPC headquarters are in Abuja, FCT, Nigeria

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Sinopec
China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group is a state-owned company solely invested by the State, functioning as a state-authorized investment organization in which the state holds the controlling share.

Sinopec Group is headquartered in Beijing, China.

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Chevron Petroleum Nigeria Ltd.
Chevron is the 3rd-largest oil producer in Nigeria and one of its largest investors, spending more than $3 billion annually.

The company operates under a joint-venture arrangement with the Nigerian National Petroleum Corporation 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.

Chevron also has extensive interests in deepwater Nigeria. The Agbami Field is one of Nigeria’s largest deepwater discoveries. The company also has an interest in another deepwater development, the Usan project.

Chevron Corporation is headquartered in San Ramon, California, United States.

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Esso Exploration and Production Nigeria Limited
Esso Exploration and Production Nigeria, Ltd. engages in the exploration, production, transportation, and sale of crude oil and natural gas. The company was founded in 1993 and is based in Nigeria. Esso Exploration and Production Nigeria, Ltd. operates as a subsidiary of Exxon Mobil Corp.

Exxon Mobil Corporation is headquartered in Irving, Texas, United States.

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Nexen
Nexen’s roots may be in Western Canada but today we operate on an international stage. Nexen has grown into a global upstream oil and gas producer. Nexen’s origins date back to the formation of Canadian Occidental Petroleum Ltd. (Canadianoxy), a Western Canadian oil and gas producer, in 1971.

Nexen is an upstream oil and gas company responsibly developing energy resources in some of the world’s most significant basins – including the UK North Sea, offshore West Africa, the Gulf of Mexico and Western Canada. Nexen is strategically focused on three businesses: conventional oil and gas, oil sands and shale gas.

Nexen’s offshore West Africa is a core area that’s expected to contribute high-margin production. At full capacity, the Usan Floating Production, Storage and Offloading (FPSO) unit has the capacity to handle 180,000 barrels of oil per day (bbls/d). Of that capacity, 36,000 bbls/d is net to Nexen.

Nexen is the 2nd largest oil producer in the UK North Sea, thanks to the resource-rich Buzzard facility, which in 2011 generated about 62,000 boe/d net to Nexen. We’ve doubled our proved reserves in the North Sea since 2004 and continue to actively explore in the region.

Nexen is headquartered in Calgary, Alberta, Canada.
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Video: Nigeria: Oil pollution in the Niger Delta

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Video: Nigeria’s plan on increased fine for oil spill

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Video: Nigeria oil sector probes

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One Comment on “French oil company, Total sells stake in Nigerian offshore block to Sinopec for $2.5 Billion”

  1. web Says:

    Great read! I’ve updated your RSS feeds to my Google account.

    Reply

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