Oil majors clawing back $110 billion from 68 Bbbls

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Fred Ojiegbe, with agency reports

The tone of urgency and pressure on multinational oil majors to adhere to transition to cleaner energy and reduce greenhouse gas emission are pushing a hurried asset load off in the petroleum industry, with eight big oil firms seeking to sell assets worth about $111 billion or N53.84 trillion.

According to industry consultancy firm, Rystad Energy, the firms put both upstream and midstream assets on auction to raise cash and also curb their emission footprints in line with commitments to the goals of Paris Agreement which  has mustered additional momentum with the signature of the United States of America.

Already, some of the companies with significant operations in Nigeria including ExxonMobil and Shell have indicated intention to sell some assets in Nigeria as government and investors engage in protracted fiscal dispute.

A Reuters reports has it that European companies including BP, Shell and Total are also looking to focus their oil and gas operations on the most profitable and least polluting projects after pledging to slash carbon emissions in coming decades. Exxon and BP each hope to sell $25 billion of assets in the coming years, while Shell aims to dispose of $5 billion a year.

In Nigeria, Shell is running aggressive divestment campaign as it runs from its sordid past with host communities onshore Niger Delta where the company has no longer welcome on account of heavy footprints on the environment.

A UNEP report indicted to the company for decades of environmental degradation in the Niger Delta and reluctance to invest in remediation which, the UNEP report stated, would take princely $3.0 billion and three decades of phased campaign to complete.

Weeks ago, Shell executed yet another divestment deal on operated joint venture captured in oil mining lease (OML) 17. The company has recovered over $12 billion in the divestment campaign that started in 2010.

According to Rystad, Exxon Mobil, Chevron, Royal Dutch, BP, Total, Equinor, Eni and ConocoPhillips, are expected to sell assets with resources of around 68 billion barrels of oil and natural gas equivalent worth an estimated value of $111 billion.

Despite the opportunity for cheap buys presented by the prevailing low price cycle, Oracle Intelligence reports that independent oil firms are making cautious approach to deals following growing global demand shift to renewable energy and the brazen indignation of multilateral lenders and portfolio investors towards fossil fuels.

Rystad also pointed out though that the timing of the asset divestments at a time of acute funding crisis in the industry and grim demand outlook throws up a huge challenge.

Oracle Intelligence reports that all the world’s biggest oil companies are repositioning their business portfolios to align with shifts in demand as energy consumers across the world display unmistakable sentiments and preferences to cleaner alternatives to petroleum.

CEO of Canadian-listed Africa Energy, part of Lundin Group, Garrett Soden,  that reduced investments by the majors could however lead to tighter supply and higher oil prices, which would increase the value of their resources.