Despite their significant presence in Nigeria’s oil and gas industry, ExxonMobil and Chevron have not found it possible to engage in gas exploration in the country that has been host to them for more than four decades.
The two U.S. supermajors could gain access to Algeria’s vast natural gas resources as they are in advanced talks for exploration and production deals in the North African country, The Wall Street Journal reported weekend, quoting sources with knowledge of the talks and Algerian Energy Minister Mohamed Arkab.
With their many years of operations in Nigeria, the country is left scouting for investors who would be interested in the explorations and development of its gas resource, especially now that it is the platform it is willing to ride on for its energy transition project. Even though the two companies still maintain huge presence in Nigeria they have made any serious investment in almost a decade.
Analysts have however stated that the Nigerian government should be blamed for its ineptitude toward investment in oil and gas.
For over a decade, the government could not decide over the Petroleum Industry Act when it was still Petroleum Industry Bill.
The inability of the government to tame insecurity in the Niger Delta helped also to scare away investors that took their money
Algeria holds huge conventional natural gas reserves, and it is also estimated to have the third–largest shale gas reserves in the world after China and Argentina.
ExxonMobil and Chevron could complete the talks on the deals with Algerian state-held oil and gas firm Sonatrach by the end of this year, the sources told the Journal.
“I am pushing Sonatrach,” Arkab told the WSJ, “because we need to increase our volumes.”
Sonatrach is discussing the terms of agreements with Exxon and Chevron which would include both conventional and shale gas reserves exploration.
Earlier this year, the Journal reported that Chevron had increased efforts to reach an energy exploration agreement with Algeria and was assessing the North African country’s estimated huge shale gas resources.
Most of Algeria’s gas exports are heading to Europe, which is increasingly betting on Africa to import large volumes of pipeline gas and LNG to replace pipeline gas supply from Russia, which was Europe’s top gas supplier before the Russian invasion of Ukraine.
Italy’s energy major, Eni, has been particularly active in securing more natural gas supply for Europe from Africa and has fast-tracked projects in Africa to meet Europe’s gas demand in the absence of Russian pipeline deliveries.
At the announcement of the 2022 results in February, Descalzi said, “During the year, we were able to finalize agreements and activities to fully replace Russian gas by 2025, leveraging our strong relationships with producing states and fast-track development approach to ramp-up volumes from Algeria, Egypt, Mozambique, Congo and Qatar.”
Olusola Bello with additional report from Oilprice.com
