International oil companies (IOCs) are divesting their stake in Nigerian oil fields. Shell, Total and Chevron are among the companies which have sold their stake in shallow water assets in Nigeria.
The three major companies have sold stakes worth $6.5 billion in 2013. Oando Energy Resources will soon take over ConocoPhillips energy business in the country in 2014. The deal has been estimated at $1.7 billion.
International oil companies are keen on selling their stake in 13 oil blocks in Nigeria. Oil majors have spent nearly $100 billion globally to improve oil and gas output. However, the production has not improved as per expectations.
In January 2014, Shell issued profit warning for upcoming quarters. Shell registered massive decline in profit at $2.9 billion in the fourth quarter of 2013 compared to $5.6 billion in the fourth quarter of 2012.
In June 2013, Shell had announced its plan to sell four shallow water or onshore oil blocks in Nigeria.
Nigeria had awarded 24 oil fields to 31 companies in 2003. Till date, only eight companies have managed to start production from the allocated oil fields.
The companies have blamed corporate governance issues for lower investor interest in their projects. Nigerian oil ministry is urging the companies to start production as the economy depends on oil exports to a large extent.