Conoil Producing, the Nigerian E&P independent owned by billionaire Mike Adenuga, has emerged winner of the bid for the 40% equity held by Chevron Corp. in Oil Mining Leases (OMLs) 86 and 88.
The Lagos based junior is currently in discussion with the California-headquartered major.
It wasn’t clear, as at press time, how much Conoil is betting on the assets, which lie in contiguity with some of its own producing properties.
Chevron had been trying to dispose of the shallow water acreages, located off the mouth of the current Niger Delta basin, for over five years.
They are part of the five Nigerian tracts acquired in the course of the merger between Chevron and Texaco 21 years ago.
But things only revved up in the last seven months.
OML 86 contains the Apoi fields, the largest being North Apoi.
It also holds Funiwa, Sengana and Okubie fields.
One recent discovery, Buko, straddles Shell Nigeria operated Oil Prospecting Lease (OPL) 286 and is either on trend with, or on the same structure as the HB field in OPL 286.
OML 88 holds the Pennington and the Middleton fields, as well as the undeveloped condensate discovery, Chioma field.
The conclusion of this sale means that Chevron has disposed of all the legacy shallow water assets it acquired when it purchased Texaco in 1999.
Between 2013 and 2015, Chevron sold its stakes in OMLs 83 and 85, both of them former Texaco Nigeria assets.
Oil exploration suffers setback as Nigeria’s rigs fall 33%
With many oil and gas companies struggling to stay afloat amid the current market situation, exploration activity in the country has suffered a decline as the number of active rigs fell by 33.33 per cent in July.
Data obtained by our correspondent from the Organisation of Petroleum Exporting Countries showed that Nigeria’s rig count fell to six in July from nine in June.
The rig count, which stood at 21 in March, fell to 16 in April and eight in May.
The rig count is largely a reflection of the level of exploration, development and production activities occurring in the oil and gas sector.
The global oil benchmark, Brent crude, plunged to as low as $15.98 per barrel in April, its lowest since June 1999. It traded around $45 per barrel on Monday.
Analysts at Financial Derivatives Company Limited said on Monday that oil price volatility would continue in the coming weeks due to supply and demand concerns.
“The relaxation of output cuts by two million barrels per day in August will keep oil prices within the $42-$45 per barrel band,” they said in a report.
The collapse in crude oil demand and prices occasioned largely by the coronavirus pandemic has forced many operators to put exploration on the back burner.
One of the major indigenous independent oil companies in the country, Seplat Petroleum Development Company Plc, said late last month that to adapt to current market conditions and as directed by its Nigerian government partners, it was looking to significantly reduce its costs by at least 30 per cent across the business.
“Drilling of oil wells has been suspended, with all non-essential capital expenditure under review, to consider only activities that can be supported in the new oil price environment,” it said in its 2020 half-yearly financial results.
Asked what the exploration landscape would look like in Nigeria post-COVID-19, the Chairman, Society of Petroleum Engineers Nigeria Council, Joseph Nwakwue, said, “The outlook is no doubt gloomy given the relatively low forecasted oil prices and prevailing high unit costs in Nigeria.”
He listed three factors that could change the scenario.
The PUNCH had reported earlier this month that several major oil and gas projects in Nigeria may suffer further delays as the IOCs operating in the country saw their financials take a dive in the second quarter of this year.
Envoy warns Nigerians abroad against demeaning comments