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ExxonMobil, Total, Chevron: Oil Majors Shy On Nigeria, Look Elsewhere For Growth Opportunities

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Oil majors are fine-tuning their growth strategies either for petrochemicals, gas or energy transition programmes, but Nigeria is not a high priority investment destination.

According to their full-year 2018 financial results released recently, ExxonMobil, Total and Chevron booked strong results despite a 40 percent decline in the value of oil prices in the fourth quarter of 2018. Some of the oil majors reported earnings similar to 2014 when oil prices surged above $100 on the back of strong investment in technology, diversifying markets and product offerings, thereby beating expectations of most analysts. but with the exception of Total and Royal Dutch Shell, other oil majors are betting bigger on other parts of Africa and the world in terms of investment.

Total’s 200,000 barrels per day Egina in Nigeria has started production and will export three cargoes of 3 million barrels of crude each in February. Royal Dutch Shell recently took final investment decision on Nigeria’s Assa North on gas development project targeting 300 million standard cubic feet of gas per day. These were about the big-ticket investments from the oil majors in 2018.

ExxonMobil, however, set its investment sail for Australia and has made final investment decision to develop the West Barracouta gas field in Bass Strait to bring new gas supplies to the Australian domestic market.

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The Texas-headquartered oil major also has investment interests in Africa, but in Mozambique’s Area 4. Co-venture participants, including ExxonMobil, secured liquefied natural gas (LNG) off-take commitments from the partners’ affiliated buyer entities, a key milestone enabling a rapid move toward a final investment decision in 2019 on the first phase of the Rovuma liquefied natural gas (LNG) project.

The company has commenced operations of a new coker unit at its Antwerp refinery in Belgium to convert heavy, higher-sulphur residual oils into high-value transportation fuels, such as marine gasoil and diesel. The new 50,000 barrel-per-day unit expands the refinery’s capacity to meet demand for cleaner transportation fuels throughout northwest Europe.

British Petroleum has focused on the Clair Ridge project, west of Shetland in the North Sea. This was the sixth upstream major project to come on-stream in 2018, following earlier start-ups in Egypt, Russia, Azerbaijan, the Gulf of Mexico and Australia.

BP has sanctioned the first phase of the Greater Tortue Ahmeyim LNG development offshore in two West African countries, Mauritania and Senegal. The Cassia Compression and Matapal gas projects in Trinidad were announced in the quarter. In January, BP announced approval of the Atlantis Phase 3 development in the Gulf of Mexico.

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On 21 December, BP announced final investment decision, subject to regulatory approvals, for Phase 1 of the Greater Tortue Ahmeyim LNG development in Mauritania and Senegal (BP operator 62 percent in Mauritania and 60 percent in Senegal).

On 17 December, Sonangol and BP signed an agreement to progress to final investment decision on the development of the Platina field in deepwater Block 18, offshore Angola. Sonangol also agreed to extend the production licence for the BP-operated Greater Plutonio project on Block 18 to 2032, subject to government approval, and for Sonangol to assume an equity interest in the block (BP operator 50 percent and Sonangol Sinopec International Limited 50 percent).

In September, Rosneft and BP agreed to jointly explore two additional oil and gas licence areas located in the Sakha (Yakutia) republic of the Russian Federation. In December, the re-issue was completed of the Kharampurskoe and Festivalnoe subsoil-use licences to LLC Kharampurneftegaz, in which Rosneft and BP own 51 percent and 49 percent interests, respectively.

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Royal Dutch Shell’s portfolio in 2018 focused on Argentina shales, which has progressed 3 Vaca Muerta blocks into development and up 70,000 barrels of oil-equivalent per day with 80 to 90 percent of Shell’s interest. Shell has also acquired 310,000 acres off the Coast of Massachusetts and New Jersey with potential to generate 4.1GW of electricity.

Chevron’s net oil-equivalent production of 2.23 million barrels per day in the fourth quarter 2018 was up 156,000 barrels per day from a year earlier. Production increases from major capital projects, primarily Wheatstone and Gorgon in Australia, were partially offset by normal field declines and production entitlement effects.

“Our net oil-equivalent production grew more than 7 percent in 2018 to a record 2.93 million barrels per day. We expect that 2019 production will continue to grow by 4 to 7 percent, excluding the impact of asset sales,” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer.