Western oil companies pay to play in Nigeria

24-Nov-2009

A Western supermajor paid $600 million in signature bonuses on lease renewals in Nigeria, the country's Ministry of Petroleum Resources announced this week.

ExxonMobil extended leases on three blocks for 20 years, paying handsomely for the privilege. The blocks have a combined output of 580,000 barrels per day.

Western oil companies' lease renewals with the Nigerian government have been contentious, reports say. ExxonMobil's just-concluded negotiations were lengthy; Royal Dutch Shell is commencing renewal negotiations at present. Shell had sued the government of Nigeria because of its decision to renew leases under new terms, but the Minister of State for Petroleum, Odein Ajumogobia, confirmed that Shell has withdrawn its suit.

ExxonMobil, in its announcement that its leases had been renewed, noted its longstanding partnership with the government and people of Nigeria. "Our projects have not only generated significant income for Nigeria but also promoted economic and social development in the country," the company said.

China National Offshore Oil Corporation has stated its desire to invest in Nigerian oil production. The company expressed interest in 23 oil licenses in the country; 16 of those were run by either Shell, ExxonMobil or Chevron and are in the process of being renegotiated.

Breaking news brought to you by the Oxford Princeton Programme, specialists in oil courses. This and other related topics are part of the forthcoming course Overview of Physical Crude Oil Trading and Operations on 19-20 January, 2010 in Singapore.