French energy giant, TotalEnergies has attributed its plans to join the bandwagon of other oil majors and sell its stake in an onshore oil production joint venture in Nigeria, to the disruption of local communities which has become a source of great concern.
The proposed divestment by TotalEnergies will be the latest in a series of similar actions by other International Oil Companies (IOCs) like Shell and ExxonMobil, who had both several months ago, announced plans to divest from their Nigerian oil assets.
This was made known by the Chief Executive Officer of Total Energies, Patrick Pouyanne, at an earnings conference call on Thursday, where he said that the French oil firm will put up for sale its 10% interest in a company operating 20 licenses onshore Nigeria.
According to Bloomberg, Pouyanne said, ‘’Disruption of local communities are sources of great concerns.’’
The licenses are being operated by another supermajor, Shell, which is also looking to divest Nigerian assets as it has been reported that it was already considering bids from 4 indigenous oil firms for its 30% shareholding of the joint venture.
What you should know
- Oil majors have for over a decade been selling their onshore and shallow water assets to Nigerian independent producers.
- Recall that in July 2021, Shell launched a major divestment of its Nigerian asset with the planned sale of the company’s shallow-water and onshore asset interests in the SPDC joint venture, which supplies around 10% of Nigeria’s gas demand.
- This was because it no longer views its activities in the Niger Delta as core to its ongoing strategy, which is driven by the Environmental, Social and Governance (ESG) pressure from its investors.
- A top executive of Shell had said that the company cannot solve numerous community problems in Niger Delta which it has encountered in Nigeria’s onshore in recent years, including oil theft and pipeline sabotage, as well as lawsuits brought up by local communities over oil spills.
- Also, on February 25, Seplat Energy Plc announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware for $1.28 billion.
- The transaction is reminiscent of the $1.5 billion ConocoPhillips Nigerian operation acquisition by Oando Plc in 2014 and entails the acquisition of ExxonMobil Nigeria’s entire offshore shallow water business.
GOOD for them!
Nigerians and their pennywise-pound foolish ways. In return for a handful of extorted dollars, they lose billions in foreign direct investment.
Are these indigenous companies going to be spared of the challenges tht occassioned the divestment by the multinationals? I don’t think so. With time, the local companies will be subjected to the same attacks and other local challenges