Nigeria’s state oil company said
on Monday Exxon Mobil (XOM.N) has until Thursday to express its
interest in three large oil-drilling licenses that the U.S.
energy firm says it has already been granted.
Exxon says it signed agreements in 2009 with the Nigerian
government for the long-term renewal of licenses OML 67, 68 and
70, which it operates as part of a joint venture with state-run
Nigerian National Petroleum Corp (NNPC).
The Nigerian government has said Exxon needs to express an
interest in acquiring licenses for these blocks.
“The Nigerian government has given Exxon seven days to
express an interest in these licenses. Those seven days expire
on Thursday,” an NNPC spokesman said.
The disputed blocks are situated in the shallow water
creeks of the Niger Delta and are some of the largest
oil-producing assets in Africa’s largest energy industry, with
a combined capacity of more than 500,000 barrels per day.
“MPN (Exxon), as operator, strongly maintains that the
NNPC-MPN joint venture’s long-term rights in those leases are
entirely valid and legally binding,” Gloria Essien-Danner,
Exxon Nigeria executive director, said in a statement.
“Accordingly, MPN will vigorously protect the rights that
it acquired in 2009,” she said. Exxon said it would work with
the government to resolve any “confusion” over the leases.
Delays to wide-ranging energy reforms mean several expired
drilling licenses dating back as far as 2008 have not been
renewed with foreign oil companies, including Royal Dutch Shell
(RDSa.L) and Chevron (CVX.N).
The Nigerian government has been reluctant to sign new
deals until the Petroleum Industry Bill (PIB), which is likely
to increase royalties and taxes, has been passed into law.
But the ambitious reforms have been subject to numerous
delays and amendments, making the details of the final draft
unclear. Oil executives have said billions of dollars of
investment are on hold until there is clarity.
Nigeria’s parliament is debating the bill, but the current
administration ends later this month. If the PIB is not passed
by then, new lawmakers may make amendments that could lead to
months of further delays.
The government hopes the bill will tackle issues including
funding shortfalls at its joint ventures with foreign firms,
insecurity in the Niger Delta, increasing local involvement in
the industry and production of more gas for domestic power.
May172011