Eni mulls selling onshore oil, gas operations in Nigeria

7/24/2015

By DINESH NAIR and RUTH DAVID
Bloomberg

Eni, Italy’s largest oil company, is considering selling part or all of its onshore Nigerian operations as it seeks to divest peripheral businesses amid a drop in oil prices, people familiar with the matter said.

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 people said, asking not to be identified as the information is private. Depending on what Eni decides to sell, the transaction may raise from $2 billion to $5 billion, the people said. It could also decide to keep the operations, they said.

A representative for the company declined to comment. Shares in Eni were trading at 15.94 euros ($17.50) at 4:54 p.m. in Milan.

Oil companies, including Royal Dutch Shell and Chevron, are 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 2 million bbl of oil makes it Africa’s largest producer.

Eni CEO Claudio Descalzi has announced plans to sell assets worth 8 billion euros ($8.8 billion) in 2015-2018, including shares in subsidiaries Galp Energia and Snam. He also proposed a 17% cut in investment over the same four years compared to previous plans to adjust to lower prices.

Eni’s wholly-owned subsidiary in the country, Nigerian Agip Oil Co., operates under a joint-venture agreement with Nigeria’s state oil company NNPC and ConocoPhillips. NAOC also operates two onshore exploration licenses.

The company said in July that 12 people died and three were injured in an explosion during repair work at its crude oil pipeline in Nigeria.