Bids for Chevron's Oil Blocks to be Submitted Next Week.

United States oil major, Chevron Corporation, will next week receive bids from about 30 companies jostling to acquire its interest in three Nigerian oil blocks, while prospective buyers will pay 15 per cent of the transaction value of the assets on September 30. Chevron had in June unveiled plans to sell its 40 per cent interest in five onshore blocks, beginning with Oil Mining Leases (OMLs 52, 53 and 55, which will be collectively sold to one firm. 

OML 82 and 85 will be sold on a later day in a separate bidding process, according to the company. Royal Dutch Shell, Italy's Eni and France's Total had earlier commenced sale of their stakes in some onshore assets in the Niger Delta, citing security concerns and need to support indigenous companies grow their production capacity.

Oil industry sources estimate the mean value of the three blocks combined at $500 million to $600 million. The three blocks have total oil reserves of about 134 million barrels and five trillion cubic feet of gas, Reuters quoted sources as saying, adding that one company with doubtful credibility was willing to bid $1.7 billion for the assets. South Atlantic Petroleum (SAPETRO), which already has joint ventures with Total and China's China National Offshore Oil Corporation (CNOOC), as well as First Hydrocarbon Nigeria, the local-arm of London-listed Afren were said to be involved in the bids. Other companies said to be involved include indigenous Brittania-U, Vertex, Sogenal Oil; Seven Energy and Seplat Petroleum Development Company, which is partly owned by the French oil explorer Maurel & Prom and Swiss-based commodity trader Mercuria.

Chevron, which owns 40 per cent stake in 13 Nigerian onshore blocks, also has deep offshore assets, including the prolific Agbami field. The Nigerian National Petroleum Corporation (NNPC) owns the remaining 60 per cent of these onshore assets, with Chevron as the operator. Chevron’s net daily production in Nigeria averaged 238,000 barrels of crude oil and 165 million cubic feet of natural gas in 2012. Though Chevron is selling the assets, it cannot transfer the operatorship to the new buyers as the Joint Operating Agreement (JOA) between the NNPC, Shell, Chevron and other partners provides that when any operator sells its stake in any asset, the NNPC automatically assumed the operatorship of the asset.

Source:  (THISDAY)