Three licenses permitting Exxon Mobil to operate in Nigeria with Nigerian National Petroleum Corp (NNPC) are in jeopardy. Exxon Mobil claims the licenses in question were renewed in 2009.
The licenses correspond to three leases that account for about 580,000 barrels of oil per day, according to Bloomberg News.
For two years, there have been talks underway for deals concerning 16 oil blocks in Nigeria. Chevron and Royal Dutch Shell were involved in these negotiations, but Exxon Mobil was the only one to have signed a renewal in 2009, which included leases for the three areas in question.
Exxon's position is that the previously signed agreements are still valid. Therefore, the venture between NNPC and Exxon is still legal. Company representative Gloria Essien-Danner said that Exxon will protect its rights to the three leases.
New Agreement Signings Stalled
The government in Nigeria, however, has held off on signing new agreements until after the Petroleum Industry Bill passes, according to Reuters. The government may receive additional money from taxes after the bill is passed. The bill has been held up due to constant restructuring and amendments. The final version of the bill is not clear.
The bill may stay in limbo until the term of Nigeria's present administrators end. Then the bill may continue to be held up while the new administration completes revisions.
Nigeria produces the most oil in the continent of Africa. Exxon Mobil, Shell and other companies conduct business with NNPC, which pumps 90% of Nigeria's crude oil, Bloomberg reports.
Key Statistics – Oil in Nigeria (Datamonitor)
- The revenue from oil production in Nigeria was about $65 billion in 2010, translating to a 2% compound annual growth rate (CAGR) between 2006 and 2010.
- The consumption of the oil decreased, with a compound annual rate of change at 2% for the period spanning 2006-2010. About 802 million barrels were be consumed in 2010.
- Industry performance is predicted to fall with a compound annual rate of change of 0.3% over the period spanning 2010-2015. The industry is predicted to be valued at about $63 billion by December 2015.