Login

Lost your password?

Sign Up

Register

Login

Login

Lost your password?

Register

Thursday, July 7, 2022
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion

Africa's
Investment
Gateway

The Exchange
  • Login
  • Register
Subscribe
This Month's Edition
Previous Editions
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
No Result
View All Result
The Exchange
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
No Result
View All Result
The Exchange
LOGIN
alternatetext
TotalEnergies has initiated the sale of its 10 per cent shares in Nigerian joint project SPDC. www.theexchange.africa

TotalEnergies has initiated the sale of its 10 per cent shares in Nigerian joint project SPDC. [Photo/Textilegence]

TotalEnergies bolting out of Nigerian oil joint venture

The scourge of oil theft, which has reached enormous and potentially dangerous proportions, is lamented by industry professionals as a major deterrent to venturing into the oil and gas sector

by Maingi Gichuku
May 19, 2022
in Investing
0
Share on FacebookShare on LinkedIn
  • It has been confirmed by TotalEnergies that it will be selling its interest in 13 onshore fields and three fields located in the shallow sea
  • TotalEnergies launches sale of a stake in Nigerian oil joint venture, SPDC; other partners are Shell 30 per cent, NNPC  55 per cent, and Eni  5 per cent.  
  • The scourge of oil theft, which has reached enormous and potentially dangerous proportions, is lamented by industry professionals as a major deterrent to venturing into the oil and gas sector
  • It is estimated that the country lost approximately $3.5 billion in revenue due to the theft of crude oil in 2021, which corresponds to almost 10 per cent of Nigeria’s foreign reserves

TotalEnergies has initiated the sale of its 10 per cent shares in Nigerian joint project SPDC.

According to a Reuters report, Canada’s Scotiabank is managing the sale as a financial adviser, a sale document bidding for interest revealed. The French oil company announced the sale in late April.

It has been confirmed by TotalEnergies that it will be selling its interest in 13 onshore fields and three fields located in the shallow sea. Together, these fields produce more than 20,000 barrels of crude oil equivalent per day. The infrastructure, including 3,500 kilometres of pipelines connected to two important oil export terminals (Bonny and Forcados), is included in the deal.

The French firm will maintain ownership of oil mining licenses 23 and 28, as well as its investment in the accompanying gas pipeline grid that supplies Nigeria LNG with fuel.

Because of years of sabotage and theft that have deteriorated resources along the oil-rich delta region, large oil corporations have been gradually abandoning Nigeria’s onshore production. This is owing to the fact that Nigeria’s onshore production is located in a hostile environment.

SPDC is a partnership in which Shell (SHEL.L) has a working interest equal to thirty per cent, NNPC (NNPC.L) has a working interest equal to fifty-five per cent, and Eni (ENI.MI) has five per cent. Additionally, Shell is selling its investment in SPDC. However, these attempts have been stalled due to a legal dispute.

Why are oil majors fleeing Nigeria?

In March of this year, the Nigerian National Petroleum Company, often known as NNPC Limited, provided confirmation that international oil companies (IOCs) are expanding their operations and leaving Nigeria.

Mele Kyari, Managing Director of the Nigerian National Petroleum Corporation (NNPC), made this announcement in Abuja at the Nigeria International Energy Summit 2022 (NIES2022).

According to him, the reason international oil companies left Nigeria was not because of the country’s poor policies but rather of the worldwide initiative for energy shift and the goal of reaching net-zero carbon emissions.

His exact comments were, “Companies are selling off their assets. They are literally abandoning our country, which is probably the most accurate way to express it. However, despite the lack of opportunities, they have no intention of leaving.

“This is happening because businesses are refocusing their portfolios on areas in which they can add value and, in addition to that, areas in which they can also contribute to the movement toward producing no net carbon dioxide.” We have a complete and utter understanding of this.

To put it another way, these “oil giants” are abandoning Nigeria in droves because, in comparison to other surroundings, the country is no longer sufficiently hospitable for them or the “new companies” they might expand into (including transactions involving clean and renewable energy sources). This new trend is, to say the least, ominous for Nigeria, whose economy will continue to rely significantly, at least in the short-to middle-term, on earnings from the production and export of crude oil.

Regrettably, this departure of IOCs is occurring across the industry as a whole, including deep waters, mid-sea, and shallow waters players. According to the Nigerian Extractive Industries Transparency Initiative (NEITI), the ombudsman of the extractive industry, the persistent problems of vandalism and oil theft were some of the causes responsible for the continuous divestment by IOCs and large corporations in the shallow sea sector. At the NIES2022 conference in Abuja, the Executive Secretary of NEITI, Dr Ogbonnaya Orji, lamented the fact that Nigeria had lost 260.15 million barrels of crude due to theft in the previous five years.

“This is a huge problem that is currently affecting our shallow and mid-sea operations very negatively and seriously,” he said, adding that many IOCs and large corporations are gradually exiting the shallow sea sector due to the difficulties in dealing with vandalism, oil theft, and deliberate sabotage.

The scourge of oil theft, which has reached enormous and potentially dangerous proportions, is lamented by industry professionals as a major deterrent to venturing into the oil and gas sector.

alternatetext

It is estimated that the country lost approximately $3.5 billion in revenue due to the theft of crude oil in 2021, which corresponds to almost 10 per cent of Nigeria’s foreign reserves.

Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, stated that due to the unstable operating environment, many oil companies have been forced to divest their producing assets and have left Nigeria, while others have chosen to conduct offshore exploration.

Yusuf stated that the oil industry has regularly contributed less than ten per cent to Nigeria’s Gross Domestic Product (GDP). He also stated that, as of the third quarter of the previous year, 2021, the oil industry was one of the few that decreased.

The operators of the industry are of the opinion that the primary factor contributing to oil theft in Nigeria is obsolete oil pipeline infrastructure, which makes it simple for third parties to commit breaches.

Furthermore, there is a lack of investment across the sector, which, along with the poor security of the country’s waterways, demonstrates that not much is being done to combat crime. In some instances, security agencies collude with cartels in order to get paid, which is a clear indication that not much is being done.

Read: Tanzania, Uganda crude oil deal soars as new MoU is signed

Tags: Africa's Oil curseNigeria Oil SectorTotal EnergiesTotal Nigeria Plc

STATE OF ECONOMY - GET THE REPORT

ASSESSING EAST AFRICA

Loading...

Maingi Gichuku

Maingi Gichuku is passionate about helping African businesses grow by offering technology solutions. With a BSC in Zoology and biochemistry, Gichuku yearns for an Africa that can find solutions to its challenges. My drive is to see an economically dynamic Africa and embrace its populations by creating opportunities cutting across the social and economic strata.

Related Posts

www.theexchange.africa
Business

Kenya: Economic activity contracts for third consecutive month on inflation

July 6, 2022
The Humanity Node Protocol: Register to earn, invest, redeem crypto for cash. www.theexchange.africa
Investing

The Humanity Node Protocol: Register to earn, invest, redeem crypto for cash

July 5, 2022
www.theexchange.africa
Business

Kenya: Food, oil prices force average inflation to rise to 6.3% in first half of 2022

July 5, 2022
Next Post

Mapping Climate Change in the developing world, what it means for Africa.

Kenya and Tanzania economic gains from friendly diplomatic relations. www.theexchange.africa

Kenya and Tanzania: Economic gains from 'relaxed' diplomatic stance

South Africa retailer Pick n Pay to cut US$187 million in costs in 3 years www.theexchange.africa

South Africa retailer Pick n Pay to cut US$187 million in costs in 3 years

Please login to join discussion




This months edition

Features

Countries

Era of the African Passport: A mixed bag of opportunities?

by june njoroge
July 4, 2022
0

The African passport is a common passport document that is set to replace the existing nationally issued AU member states’...

Read more
Sibongile Thobakgale. She is the area sales manager for South Africa at Aggreko Africa. www.theexchange.africa
Investing

Transforming manufacturing in Africa

by Opinion
July 4, 2022
0

From cement to food and beverages to metal production and processing, manufacturing organisations are looking for sustainable energy solutions to...

Read more
Wallace Manyara. He is the Business Development Manager, Region South & East Africa, Wärtsilä Energy. www.theexchange.africa
Investing

Renewables, gas cheapest ways to meet Mozambique’s electricity demand

by Opinion
July 1, 2022
0

To meet its growing energy needs and increase electricity access across the population, Mozambique must build 1.3GW of new power...

Read more
By 2030, tech financing in Africa will hit US$90 billion. African governments have a lot to do to reduce the risk of investing in tech startups. www.theexchange.africa
Tech & Business

Challenges and opportunities across Africa’s tech ecosystems

by Njenga Hakeenah
July 4, 2022
0

In addition, governments have to make things better for businesses. Currently, tech start-ups have to pay a lot to comply...

Read more
Foreign Currency Auction System Fails to Meet Soaring Demand
Industry and Trade

Foreign currency auction fails to meet soaring demand

by Laurence Sithole
July 4, 2022
0

Despite these fundamentals, the Zimbabwe dollar has continued to slide against the United States dollar prompting the government to take...

Read more

News

Banking
Industry & Trade
Investing
Money Deals
Regional Markets
Tech & Biz
Opinion

Countries

Kenya
Tanzania
Uganda
Burundi
Rwanda
Southern Africa
Ethiopia

More

My Account
Contact us
Advertise
About us
Help Center

Subscribers Center

E-paper
Premium Stories
Education Rates
Corporate Subscriptions
Weekely Newsletter

  • My account
  • About us
  • Advertise
  • Contact
  • Privacy Policy
  • Refund Policy – The Exchange
  • Sitemap

No Result
View All Result
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
  • Login
  • Sign Up
  • Cart

© 2021 The Exchange - Powered by MediapixManaged by Supported by Digihandler,

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In