Shell, Chevron and more companies move offshore as Nigerian risks mount

By Finance

Shell, Chevron and other similar liquefied natural gas companies are moving offshore and are trying to sell land-based fields. Some of the fields pumped out 400,000 barrels a day. Royal Dutch Shell closed its operations early this year after more than 40 years.

The companies are buying fields offshore where danger of kidnapping, sabotage and crude theft is lower. Security risks are making costs 40% higher.

Rolake Akinkugbe, London-based head of oil and gas at Ecobank Research explained:
"Due to the increased level of oil theft and disruptions, a number of oil companies have started selling blocks in the troubled areas and moving to deep water offshore blocks,". "The move offshore is being viewed as a longer-term solution to the challenges faced onshore and in the shallow waters."

Shell is the oldest and the biggest energy company in Nigeria, sold 8 oil leases in 3 years. Onshore fields are now in the hands of smaller Nigerian companies.

"The move to deep offshore by these companies frees up the onshore fields for the local companies to increase their production,” Omar Farouk Ibrahim, a spokesman for the state oil company also known as NNPC, said in a phone interview on July 29. “It gives room for those who don’t have the capacity for deep offshore to participate in the industry by operating the onshore and shallow water fields."