Job losses loom over $3bn ExxonMobil’s asset sale

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Energy

Monday, April 8,2019

care of possible job losses is currently rocking ExxonMobil over plans by the United States (US) oil super major to pull out of Nigeria in a $3 billion assets sale.
The firm, New Telegraph gathered at the weekend, is also concerned over possible fallout of the plan on its workforce in Nigeria just as it is, however, “accompanying the sale with plans for staff.”
The oil major had recently settled a major industrial dispute with its staff over the sack of 860 spy police in its operation, just as a source at the firm told this newspaper that the planned sale has caused some headache for staff since the news broke last week.
ExxonMobil is Nigeria’s second biggest international oil company (IOC) in terms of production volume and assets. It, according to a report, recently held talks on the sale of a suite of oil and gas fields in Nigeria as the company focuses on new developments in U.S. shale and Guyana.
The potential disposal, the report added, quoting industry and banking sources, is expected to include stakes in onshore and offshore fields where 225,000 barrels are produced per day (bpd) and could raise up to $3 billion.
“Exxon is actively divesting in Nigeria,” one source, who was briefed on the divestment plans said.
“Many staff particularly non-core staff are talking about this development. The company, I believe, will be working hard to mitigate effects of the asset sale on workers,” an ExxonMobil staff told New Telegraph after his anonymity was guaranteed.
The company had earlier, in the same vein, divested its downstream operations in Nigeria, following the acquisition of 60 per cent equity at Mobil Oil Nigeria (MON) Plc by Nipco Plc, an indigenous downstream oil and gas company.
In a message to the Nigerian Stock Exchange (NSE) in 2016, the management of Mobil Oil Nigeria Plc said the Nigerian entity “has been informed by its majority shareholder, ExxonMobil Oil Corporation, that it has agreed, subject to regulatory approvals, to sell its shares representing 60 per cent of Mobil Oil Nigeria’s shares to Nipco Investments Limited, a wholly-owned subsidiary of Nipco Plc.”
Exxon declined to comment on the new planned pull out from Nigeria and the sale of $3 billion assets.
The Irving, Texas-based company is one of the largest oil and gas producers in Nigeria, with 106 operated platforms. Its oil output in the West African country reached 225,000 barrels per day (bpd) in 2017, its website says.
Exxon officials have held talks in recent weeks with several Nigerian companies to gauge their interest in the fields.
One source said Exxon was soon due to open a “data room” – which would provide technical information on the fields, such as seismic and production details – in Nigeria.
The discussions focused on a number of onshore fields Exxon shares in joint ventures with Nigerian state oil firm NNPC, including oil mining leases 66, 68, 70 and 104, one source said. Exxon’s share of oil production in those fields reached 120,000 bpd in 2017, the last year for which data was available.
Exxon is also weighing the possible sale of stakes in offshore fields in Nigeria, two sources said.
It is looking into offering for sale assets in Equatorial Guinea and Chad, according to two sources.
The Nigerian government has in the last decade supported a drive by domestic firms such as Oando, Seplat and privately held Aiteo to expand their operations in the country as international companies including Royal Dutch Shell sought to lower their presence due to oil spills resulting from pipeline sabotage.
Exxon recently launched the sale of its stake in Azerbaijan’s largest oilfield, which would mark its retreat from the former Soviet state after 25 years.
Exxon announced earlier this year plans to boost its capital spending from $26 billion in 2018 to $30 billion in 2019 and up to $35 billion next year as it seeks to develop oilfields in Guyana and the U.S. Permian basin as well as gas projects in Mozambique and the U.S. Gulf Coast.
In an analyst presentation last month, Exxon said it would accelerate its divestments to around $15 billion by 2021.

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