Exxon Mobil corporation, a Texas based company operating in Nigeria is one of the largest oil and gas producing firms in Nigeria. Exxon Mobil corporation is divesting in Nigeria as the US company has begun talks with other companies interested in their oil blocks.
Possible reasons for sale of Exxon Mobil Corporation
The sales will include the stakes in the onshore and offshore fields in Nigeria. The firm is weighing the sales of its assets in Nigeria so it can focus on new developments in the US, Shale and Guyana.
The sale could be linked to the oil spills resulting from pipeline damage which has compelled some international firms such as Royal Dutch Shell, to reduce their presence in Nigeria. This has prompted Exxon corporation to begin talks with several Nigerian companies to determine their interest in the assets for sale.
It was reported that Exxon’s output in the fields up for sale is about 225,000 barrels per day; according to a 2017 available data. The sale is centered on a number of onshore fields the company shares in joint ventures with Nigerian state oil firms, Nigerian National petroleum corporation (NNPC). They include oil mining leases 66,68,70 and 104.
The company while weighing the possible sales of its assets in offshore fields in Nigeria, is also putting out for sale oil fields in two other African countries—Equatorial Guinea and Chad.
The divestment plans by Exxon Mobil corporation is not only within Africa as the firm has also launched the sale of its stakes in Azerbaijan’s largest oilfield after twenty-five years, marking its retreat from the soviet state.
The plans and expansion drive of the company to invest in US, Shale and Guyana oilfields made them announce an increase in its capital spending from USD 26 billion in 2018 to USD 30 billion in 2019. There is possibility of increase to USD 35 billion come year 2020 in a bid to develop the oilfields.
Exxon also said through an analyst presentation in Q1 of 2019 that it would accelerate its divestments to USD 15 billion in 2021. This plans by Exxon Mobil Corporation came in the period when the Nigerian government seeks to encourage the expansion of the domestically owned oil producing firms.
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