Conoil close to acquiring two Nigerian oil blocks from Chevron: sources

Lagos — Nigerian independent Conoil is close to acquiring US oil major Chevron's stake in two Nigerian oil blocks, OMLs 86 and 88, sources close to the matter said Jan. 28.

Chevron confirmed it is in negotiations to offload these two blocks, which have a combined potential of 60 million barrels in oil reserves.

"The process of divesting Chevron's 40% interest in Oil Mining Leases 86 and 88 in Nigeria is ongoing," Chevron spokesman Ray Fohr told S&P Global Platts.

The spokesman however, said the process for the divestment of its interest in these blocks was still to be concluded.

"Conoil emerged tops among the bids submitted for the acquisition of the 40% interest held by Chevron in OMLs 86 and 88," one source said.

The Nigerian National Petroleum Corporation holds the remaining 60% stake in both blocks.

After disposing off its 40% stakes in OMLs 83 and 85 in 2015, Chevron offered to sell its interests in OMLs 86 and 88 in 2016 but the process has taken a while.

OML 88 is a shallow-water block located in the central Niger Delta with two producing fields and significant gas reserves. OML 86, also located in central Niger Delta, has six fields, but only two are producing, at very low levels.

In 2019, Chevron produced around 194,000 b/d in Nigeria, according to company data, representing about 10% of Nigeria's total output of around 2 million b/d.

Nigerian independent Conoil, which has a stake in six oil blocks in the Niger Delta, produced 14,000 b/d in 2019, according to company data.

Last year, Chevron cuts its Nigerian workforce by around 25% as it looked to reduce costs and shore up revenues badly hit by the crash in global oil prices.

Producers in Nigeria were severely hit when oil prices collapsed in March due to the coronavirus pandemic, and demand for Nigerian crude fell dramatically.

Shell on Jan. 15 announced the sale of its 30% interest in OML 17 in the Eastern Niger Delta to indigenous firm TNOG Oil and Gas Ltd.