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As part of its plans to cut back on less profitable, overseas assets in order to focus on low-cost domestic shale production in the US, ConocoPhillips has announced that it will sell all of its Nigerian assets to Oando Energy Resources Inc. for $1.79 billion.
Nigeria has become a more and more difficult place to do business and the increasing risk of violence between rival factions could severely hinder oil production in the future, with the area around the Niger delta especially prone to pirate attacks and theft.
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Oando Energy focuses on oil exploration and production in Nigeria and the Gulf of Guinea, and claims to have already paid $435 million in cash to ConocoPhillips upon the signing of the deal. The other $1.36 billion will be transferred to ConocoPhillips when the deal is completed around the middle of 2013.
As well as all of ConocoPhillips Nigerian companies, Oando Energy will receive all onshore and offshore wells, which produced an average of 43,000 barrels a day in October.
Earlier this week ConocoPhillips also announced the sale of its Algerian assets to Pertamina, the Indonesian state-run oil company, for $1.75 billion. This brings Conoco’s total asset sales to $11 billion for the year.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com