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Chevron, Shell divest 53.25% stake in Olokola LNG project

• Lack of commitment by government, PIB blamed

 

By Adeola Yusuf

Senior Correspondent, Lagos

 

The multi-million Dollar Olokola Liquefied Natural Gas (OKLNG), located between Nigeria’s Ogun and Ondo States, may have suffered a heavy setback, following the divestment of a cumulative 53.25 per cent stake by three major investors- British Gas (BG), Shell and Chevron.

A senior official in the OKLG, who craved anonymity, blamed the action of the oil majors on a number of factors, ranging from the lack of commitment on the part of the Federal Government to pursue the completion of the project and also the non-passage of the Petroleum Industry Bill (PIB).

The source said, “The project was going ahead of schedule, all of a sudden, funding ceased,” linking the frustration to the fact that many years after the memorandum of understanding (MoU) was signed, nothing concrete has been recorded.

“Presently, all the expatriates have left; the only people remaining are NNPC’s staff on secondment to the company and a few contract staff.”

The OKLNG project company was formed in 2007 by NNPC, BG, Chevron and Shell.  BG and Shell withdrew from the project in June 2012 and July 2013 respectively. Chevron Nigeria Limited (CNL) originally had 19.5 per cent equity in the project, just like Shell, and BG, 14.25 per cent, while NNPC had 46.75 per cent. Chevron’s stake however rose to 22.74 per cent after BG withdrew.

The decision by CNL, operator of the NNPC/ Chevron Joint Venture, and Shell, is said to have unsettled the Nigerian National Petroleum Corporation, another shareholder in the project.

Confirming the divestment since July 31, 2013, in a statement, Chevron Nigeria’s General Manager, Policy, Government and Public Affairs, Deji Haastrup, blamed “fruitlessness of efforts over the last eight years for the project to mature into A Final Investment Decision (FDI).”

The statement quoted Chairman, Managing Director of CNL as saying “the business decision to withdraw from OKLNG is based on a review of our investment portfolio, the lack of progress on the project and a reprioritization of resources to focus on growing domestic gas supply.”

Continuing, he said “Chevron remains fully committed to Nigeria and continues to pursue its investments in the country’s oil and gas industry.”

NNPC, the company said, was duly informed of Chevron’s decision to withdraw and the divestment process is being managed in accordance with the provisions of the Shareholders’ Agreement governing the project.

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