Why Shell, Chevron, Other Oil Majors Are Leaving Nigeria

Why Shell, Chevron, Other Oil Majors Are Leaving Nigeria

New insights have been unraveled as to why oil producers are gradually reducing their activities and planning to leave the country.

An investigation by The Nation found that Royal Dutch Shell, ExxonMobil, Total and Eni are cutting billions in spending after hitting oil companies to their advantage, thus shifting the money to renewable fuel. and focuses only on the most economical markets. .

Research by the Nation has shown that the country was able to raise just $ 3 billion, or 4 percent of the $ 70 billion earmarked for new projects in Africa in 2015-2019, development experts say, while what the economy believes is not good for oil receipts. ‘yicha

Nigeria’s loss has been the success of other African countries such as Angola, Sao Tome and Principe, where some IOCs have made large investments in recent years.

In Sao Tome and Principe, for example, it is now heavily serviced by distant and nearby oil companies. It should be noted that a consortium of U.S. firms, including Chevron Texaco and ExxonMobil, was one of the first to obtain an oil license with Norwegian company EER, which, with many other prospects, exceeded $ 70 million.

Confirming this development, Delta State Commissioner for the Environment, Hon. Oil experts like Shell, Chevron and others may have been forced to answer a question asked by Onogba Christian, our correspondent, by the Port Harcourt branch of the Nigerian Institute of Directors (IoD) as part of the Environmental Stakeholders Forum. . presenting the socio-economic realities that have created a poor environment for the existing business environment to plan for exit to the country.

In particular, he said: “The first horrific symptoms that manifested themselves were deliberate attempts to move the headquarters of international oil companies (IOCs) out of the Niger Delta. When this happened a few years ago, it was bad. was an alarm.

“Of course, you can’t put all the blame on the IOC, because no entrepreneur wants to invest in an area where insecurity is a big problem. The problem is really related to third-party intervention, weak legislation, and other factors that are the root causes of influencing investment decisions.

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To address this problem, the government, he said, needs to ensure a conducive environment for business development. “I am confident that many oil managers who have left the country will return once they are convinced that investments can be guaranteed,” Christine assured.

Jasper Jumbo, chairman / CEO of Niger Delta Projects Consortium Limited, echoed similar sentiments, saying, “No one wants to do business in a chaotic environment. No business can survive in such a situation where it is difficult to live in peace. ”

International energy companies operating in Nigeria are concerned that the country’s long-running repeal of its oil industry law will stop it from investing in new offshore projects.

In a joint presentation, OPTS called on lawmakers to remove the hydrocarbon tax because producers still pay income tax to companies.

“Our review of the oil industry bill shows that deep water supply does not create the right conditions for future investments and new projects to start,” said Mike Sangster, managing director of Total SE’s Nigeria division. , To lawmakers at a hearing in Abuja. soon capital.

To attract new investment, the proposed law should provide full royalty benefits or a terminated royalty program for the first five years of production for deep-seated oil projects, Sangster said, adding that Total, including 30 oil producers, manufacturers on behalf of the sales department. He heads Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp. and Eni SpA.

The twenty-year bill regulates how Nigeria’s energy assets are managed and financed. The bill, which was first introduced in parliament in 2008, has been the subject of political controversy and protests from international oil companies, who have called on the government to overestimate revenues.

The permanent non-adoption of the bill has had a “huge impact” on the oil and gas sector, Nigerian Senate President Ahmad Lowan said in January last year as he opened a two-day public debate on the proposed legislation. The delays have damaged the country’s ability to “attract local and foreign capital” during a period of intense competition with other resource-rich countries, he said.

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