Wednesday, February 01, 2006

Exxon's Tillerson Visits Obasanjo, Too, With $10.1 Billion Wish List

ExxonMobil CEO Rex Tillerson is apparently so worried about losing his company's silent battle for Block 4 of the Nigeria-Sao Tome and Principe Joint Development Zone, which was won by ERHC Energy and Noble Energy in May 2005 but has not yet been paid for, that he came all the way to Nigeria to meet recently with Nigerian President Olusegun Obasanjo, according to the Guardian of Nigeria Thursday morning.

The paper provides a very detailed account of all the projects Tillerson discussed with the President and says the planned work amounts to an expenditure of $10.1 billion over the next five years.

ExxonMobil's Rex Tillerson took a $10.1 billion shopping list to Nigerian President Olusegun Obasanjo recently as the company pulled out all stops to wrest control of Block 4 in the Nigeria-Sao Tome Joint Development Zone from ERHC Energy. It won't be known until Production Sharing Contracts are signed whether the ploy - a familiar one to African leaders - was successful.
Joe Shea/The American Reporter

While oil majors are notorious in Africa for promising to build and develop big-dollar projects that never get built or developed - often while bribes change hands in lieu of them - they always get a lot of mileage out of the publicity.

The detailed list of projects Tillerson handed President Obasanjo, though, is a humdinger. It mentions everything but the Nigeria-DRSTP Joint Development Zone and the 14 billion barrels of oil that a Western Geco/Schlumberger survey says it sees there, according to the Houston Chronicle.

Fresh from the trough with a $10.1 billion profit in the last quarter of 2005, Exxon seems ready to spend every cent of that in Nigeria, if Tillerson is to be believed. But, as Nigerians have often learned, he and ExxonMobil are not to be believed.

ExxonMobil is supected of bribing Equatorial Guinea officials, according to testimony before the U.S. Senate Committee on Commerce, where Alaska Republican Sen. Ted Stevens is chairman. Stevens has blocked further hearings and the Justice Department has been slow to investigate the charges.

Here is the Guardian story, posted on its Website today:

ExxonMobil to invest N1.4 trillion in Nigeria's oil, gas sector
By Taiwo Hassan

AMERICAN oil company, ExxonMobil Corporation has concluded plans to invest about $10 billion (N1.41 trillion) in the next five years in Nigeria's oil and gas sector.

Besides, the company has concluded all arrangements to move its downstream operations to Apapa this year in alignment with the stripes systems upgrade investment that will provide a safe and comfortable working environment with the necessary technology and service support for employees.

This was disclosed by the President, ExxonMobil Corporation, Mr. Rex W. Tillerson, while paying a courtesy visit to President Olusegun Obasanjo at the Presidential Villa, Aso Rock, Abuja recently.

Tillerson said: "Nigeria is a major growth area for ExxonMobil upstream activities and we plan to invest about $10 billion in the next five years in the country's oil and gas industry."

The imperative to this comment by Tillerson may be coming on the heels that the West African region has been projected to provide approximately seven per cent of global oil supplies by 2030. Nigeria, as Africa's biggest producer of hydrocarbon, will account for a large share of the world's crude oil production.

The ExxonMobil president also listed several long-term projects being implemented by ExxonMobil upstream subsidiary companies in Nigeria - Esso Exploration and Production Nigeria (EEPNL) and Mobil Producing Nigeria. They include Yoko field, Erha, East Area additional oil recovery projects, Natural Gas Liquid project (NGL) expansion and Independent Power Provider (IPP).

To him, these projects are foresight to a key leadership quality and one of ExxonMobil's competitive strength.

Specifically, Tillerson spoke of ExxonMobil's gas conservation, utilisation and monetisation programmes in Nigeria, which has three key elements: Firstly, the East Area Project (EAP) expected to be commissioned this year and eliminate offshore non-operational flaring by re-injecting gas and enhancing oil recovery. The second element is the company's NGL II project, which will strip liquids from gas prior to re-injection. The final element is the monetisation of gas resources through a combined power and LNG project.

The early part of the power project will come on stream in 2008, whilst the LNG should be on stream in 2011. Both are concluding pre-FEED studies.

According to the company's Africa Vice President, Mr. Neil Duffin, "we are approaching production of about 800,000 net barrels a day in Africa, representing about 30 per cent of ExxonMobil's global net liquids."

Liquid production doubled between 2002 and 2004 and with about 25 per cent of corporate capital spending directed at African projects, robust growth is expected to continue. "By 2010, net liquids production from Africa will increase to nearly one million barrels a day as major developments come on stream," Duffin said.

On natural gas resource commercialisation underway, Duffin added: "Taking a portfolio view of ExxonMobil's world-wide asset base through the global functional organisation, highlights the value of our opportunities in Africa. We've identified projects that will take our Africa volumes to almost a third of our global oil production. We want to put the right people on the right activities to ensure we profitably deliver these volumes," Duffin says.

Besides, the Erha field development is expected with its first oil next month.

"These milestones highlight ExxonMobil's project management capacity and represent additional progress towards our Nigeria upstream vision of one million barrels per day by 2010," says Head, Country Manager, Mr. John Chaplin. "We are also pleased that most of our projects are on course. The breadth and implementation pace demonstrate our full alignment with government's objectives," he added.

In addition, Duffin commended the on-going economic reforms in the country, especially the anti-graft campaign of the government. Tillerson said ExxonMobil as an organisation grounded in sound ethics with the quest for transparency in the oil and gas industry in Nigeria.

President Obasanjo commended the operations of ExxonMobil in Nigeria and emphasised that the on-going economic reforms would provide the platform for friends of Nigeria to make investments in various sectors of the economy, including the oil and gas.

"We require the understanding and co-operation of the international community, especially multinational investors in this period of our quest for economic and social development," President Obasanjo stated.

Meanwhile, Chaplin noted that the upstream leadership team at their meeting established five priority areas for 2006 in support of the company's strategies and vision.

He listed the company's vision to include: "Safety first in all we do, strengthen our license to operate, enhancing our base business, developing people and organisational capacity, and commitment to meet the company's global volume of one million barrels.

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