NNPC confirms ConocoPhillips’ divestment from Nigeria

10 May 2012, Sweetcrude, LAGOS – The Nigerian National Petroleum Corporation (NNPC) has confirmed moves by the United States’oil major, ConocoPhillips, to sell its onshore and offshore oil and gas fields in Nigeria.

But, it said contrary to media reports, the US firm will retain its interest in the multi-billion dollar Brass Liquefied Natural Gas (LNG) project.

Group General Manager, Group Public Affairs Department, NNPC, Dr. Levi Ajuonuma, who made the disclosure, said ConocoPhillips’ decision to sell its assets in Nigeria was not as a result of internal business issues or adverse operating environment as Nigeria remains the destination of choice for investment.

He said the divestment decision was as a result of global reorganisation of the ConocoPhillips Group adding that sale of the company’s assets cuts across its global operation and not in Nigeria alone.

Ajuonuma said: “I confirm that ConocoPhillips their assets in Nigeria but the sale is not as a result of adverse operating environment or internal business issues. You know Nigeria remains Africa’s oil and gas hub and destination of choice for investors.

“They (ConocoPhillips) are re-organising in line with a new business model approved by their board of directors. They are streamlining their assets not only in Nigeria but across the world where they operate.

“Their interest in the Brass LNG project is not affected. They will retain their interest in the project. But if they decide to divest it, there are many investors that will gladly jump to it.”

On which companies that have shown interest to acquire the assets, Ajuonuma said the assets will be sold in an open bidding and ConocoPhillips as a commercial and profit-driven enterprise, will offer the assets to the highest bidder. He noted that NNPC, indigenous oil firms as well as Chinese and Indian companies are interested. But he noted that if the law allows the right of first refusal to partners in the ConocoPhillips joint venture, all interested firms will toe the path of the law.

A Reuters report quoted the new chief executive officer of ConocoPhillips, Ryan Lance as confirming the plans to sell the company’s Nigerian assets, but said a deal was not imminent. “We’re testing the market on our Nigerian assets,” Lance told reporters after the company’s annual meeting.

The company reportedly has hired BNP Paribas to help sell the planned assets adding that Nigerian companies that are showing interest to acquire the assets include Conoil and Oando as well as China’s Petroleum and Chemical Corporation (Sinopec), Oil and Natural Gas Corporation (ONGC) of India and Korea National Oil Corporation (KNOC).

ConocoPhillips expects to raise about $2.5 billion and possibly more from sale of the assets.