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Nigeria: Divestment of International Oil Companies' Assets Unsettles Stakeholder

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Lagos The frequency of divestment of equity by some multinational oil companies in the midst of the nation's drive to reform its petroleum industry has raised concerns on whether Nigeria will get the sector on track

Brazilian oil company Petrobras, which began operations in Nigeria less than 20 years ago, last week put the country on notice of its intention to auction its stakes in Nigerian oil fields to raise cash for domestic projects.

The company will sell its eight percent stake in the Nigerian offshore Agbami block, which is operated by US energy firm Chevron and its 20 percent share of the offshore Akpo project, operated by France's Total.

To demonstrate its determination to auction the stakes, the oil company has hired Standard Chartered Bank to manage the process, which will kick off in the next two months. The value of the a deal may fetch up to $5 billion or N795billion which is bigger than the amount earmarked to four juicy sectors of the economy under the 2013 budget.

There are fears that if the plan eventually sails through, Nigeria would eventually be the loser as it may puncture federal government's drive to attract fresh investments into the nation's petroleum sector.

Shell started divestment

Shell was said to have commenced divestment in Nigeria in 2010 with the Seplat and FHN/Afren deals. Last year, the Anglo-Dutch oil company and partners, Total and Agip Oil sold 45 percent interest in the onshore block Oil Mining Lease (OML) 40 to Elcrest Nigeria Limited.

Shell also sold its 30 percent interest in OML 30 with share production of 11,000 barrels per day in the Niger Delta to Shoreline Natural Resources Limited.

Total, sold its 20 percent stakes and operating mandate of its Nigerian offshore project to a local unit of China Petrochemical Corporation for $2.5billion.

Besides, United States of America's oil company, Conoco Phillips disposed its assets in the country to indigenous oil company, Oando Plc. The deal is said to have jerked up Conoco's assets sale to $11 billion last year.

It is said that International Oil Companies (IOCs) in the country have sold close to 50 percent stakes in over seven concessions with huge financial returns.

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