A Review of the Nigerian Energy Industry

Two firms on collision course over Chevron’s oil blocks

Chevron_Logo01 January 2014, Lagos – Barely two weeks after Chevron Nigeria Limited’s attempt to divest of 40 per cent in Oil Mining Leases (OMLs) 52, 53 and 55 resulted in a court action by one of the bidders, two other indigenous companies are heading on a collision course over the US oil multinational’s recent sale of its stakes in OMLs 83 and 85 to one of the two firms.

A Nigerian independent, First Exploration and Production (First E & P) recently clinched 40 per cent each in OMLs 83 and 85 belonging to Chevron, closing a seven-month-old bidding process that kicked off in May 2013.

THISDAY, however, gathered that another company, Petroleos De Geneve (PDG), has dragged Chevron to the federal government, alleging manipulation and is appealing to the government not to approve the deal.

When contacted on the matter, Chevron’s Manager in charge of Policy, Government and Public Affairs, Mr. Deji Haastrup, told THISDAY that his company had a policy of not commenting on ongoing commercial transaction. “Chevron has a long time policy of not commenting on ongoing commercial transactions. This transaction is still ongoing. So, we have no comment on it,” he said.

A relatively new player in the upstream business, First E&P’s track record is limited to its 10 per cent stake in ND Western, the consortium which bought Shell, Total and Eni’s combined 45per cent equity in the gas rich OML 34, for $600 million in August 2012.

The data room for OMLs 83 and 85 was opened one month before bids were invited for OMLs 52, 53 and 55 but the investors’ huge appetite for the three onshore leases overshadowed the bidding process for the less-attractive OMLs 83 and 85.

However, the OMLs 52, 53 and 55 transaction has since shifted to a Federal High Court sitting in Lagos, thus enabling Chevron to conclude the sale of OMLs 83 and 85.

Petroleos De Geneve, it was learnt, is claiming to have submitted higher bids than First E & P in the OMLs 83 and 85 deal.

By the terms of the bidding process, the bidders were required to provide standby Letters of Credit.

But Chevron was said to have alerted Petroleos De Geneve that it could not receive written confirmation from a South African bank on the Letters of Credit issued by the bank to PDG.

In this article

Join the Conversation