September 27, 2023

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Eni will become the latest oil giant to sell onshore Nigerian assets

Eni will become the latest oil giant to sell onshore Nigerian assets

Gdansk (London) September 4 (Reuters) – Italy’s Eni (ENI.MI) said on Monday that the company has agreed to sell its Nigerian onshore oil and gas unit to local oil company OANDO.LG, in the latest move. By a giant international energy company to liquidate onshore assets.

The Nigerian company said the sale of Nigerian Agip Oil Company Limited (NAOC), which is subject to regulatory approval, will nearly double Owando’s reserves to 996 million barrels of oil equivalent.

Owando added that the purchase would enable it to “significantly increase production” and “highlight the important role that local players will play in the future of the Nigerian upstream sector.”

It’s also another step out of Nigeria’s onshore sector for major international oil companies, nearly all of which, notably Shell (SHEL.L) and ExxonMobil Corp (XOM.N), have sales under way amid rampant oil theft and spills, and perpetual clashes with communities and exploration budgets. most concentrated.

Jefferies investment bank pegged the deal at more than $500 million. Neither company has commented on the price.

“Eni minimizes exposure to a difficult area plagued by fuel supply and other disruptions,” Jefferies commented in a note on Monday.

Most oil majors, including Eni, have held stakes in offshore assets in Nigeria, Africa’s top oil exporter, which has struggled to pump in the past few years due to theft and years of underinvestment. Some oil majors are loath to put cash into growing assets they want to sell.

The country, which relies on oil for the bulk of its much-needed foreign exchange, needs to invest urgently in this sector, but other sales have faced legal and regulatory hurdles.

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Exxon’s planned sale to local company Seplat remains in regulatory limbo, opposed by state oil company NNBC Ltd, while litigation has complicated sales of Shell’s assets.

Eni said the company, which focuses on oil and gas exploration and production, has interests in four onshore blocks, two onshore exploration contracts and two power plants.

The transaction is subject to local and regulatory licensing. Similar approvals have been hampered by legal and political issues in the Exxon and Shell asset sales.

It added that after the sale, Eni would retain the unit’s 5% stake in the Shell Production Development Company (SPDC) joint venture, which is managed by Shell.

Additional reporting by McDonald-Deserotoy; Editing by Gianluca Semiraro, Louise Heavens, and Mike Harrison

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