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Exxon Signs Nigeria Oil Renewals

Source: Reuters 2/22/2012, Location: Africa

Exxon Mobil signed 20-year oil licence renewals on Nigerian assets producing around 550,000 barrels per day on Wednesday, the company's country manager said, ending months of negotiations.

As wide-ranging energy reforms have been delayed by political wrangling, Nigeria has not renewed several drilling licences that expired as far back as 2008 with foreign oil companies, including Royal Dutch Shell and Chevron.

Exxon said last year it had signed leases for these blocks in 2009, but the oil ministry said these were invalid. The U.S. firm said in May it would "vigorously protect" its rights to the licences. A resolution has now been reached. The Nigerian government has been reluctant to sign new deals or renew old ones until the Petroleum Industry Bill (PIB), which is likely to increase royalties and taxes, becomes law. But the bill has been stuck in the assembly for years and has been subject to numerous delays and amendments, with no sign it could be passed soon, leaving major regulatory uncertainties. The latest resolution with Exxon shows oil licences can be rolled over even while those uncertainties are unresolved.

"We are very pleased with the outcome," Mark Ward, Exxon's head of Nigerian operations, said at the sidelines of an oil conference in the capital Abuja. "This has been a long journey and some would say a difficult journey to accomplish what we have done here today."

Nigerian Oil Minister Diezani Alison-Madueke said the leases were "renewed on mutually fair basis for which to work together for the next 20 years" and that "all other pending renewals will be expeditiously processed".

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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