Agip begins $5bn onshore assets sale in Nigeria

Italy’s largest oil company, Eni SpA, has joined Shell and Chevron in the sale spree of its onshore assets in Nigeria. New Telegraph gathered that the company’s subsidiary in Nigeria, Nigerian Agip Oil Company (NAOC) has already set a target of $5 billion that it would realise from the sale of the onshore assets it operates in Nigeria. “Nigerian Agip Oil Company, which operates under a joint-venture agreement with Nigerian National Petroleum Corporation (NNPC) and ConocoPhillips, is already at the second critical stage of the sale,” a source close to the deal told New Telegraph at the weekend. Aside from the assets on sale, the source said NAOC, which also operates two onshore exploration licenses, was adhering to the business model by the Italy’s head quarters of the company.

Eni’s Chief Executive Officer, Claudio Descalzi, had earlier announced plans to sell assets worth 8 billion Euros ($8.8 billion) in 2015-2018, including shares in subsidiaries Galp Energia SGPS and Snam SpA. He also proposed a 17 per cent cut in investment over the same four years, compared to previous plans, to adjust to lower prices.

“The company is selling part or all of its onshore Nigerian operations,” the source said, adding that this is coming as the company “seeks to divest peripheral businesses amid a drop in oil prices.” Eni has asked advisers to look at options for the assets, which include interests in oil and natural gas fields in the West African country, the sources said, asking not to be identified as the information is private. Depending on what Eni decides to sell, the transaction may rise from $2 billion to $5 billion, the sources said. It could also decide to keep the operations, they said. A representative of the company declined to comment.

Oil companies, including Royal Dutch Shell Plc. and Chevron Corporation, have been selling fields as they scale back Nigerian operations following unrest, violence and the theft of crude in the Niger Delta. The country’s daily output of about two million barrels of oil makes it Africa’s largest producer. The company said last July that 12 people died and three were injured in an explosion during repair work at its crude oil pipeline in Nigeria.