PIB Stalemate in Nigeria Leads to Exit of Oil Majors

Another two oil majors are said to  be pulling out of their commitment to Nigeria's Olokola LNG project. Both Chevron and Shell have reportedly pulled out of the project. BG Group divested from Okolola LNG four years ago. As both companies held a 19.5% stake in the LNG facility, there is now a 39% stake up for grabs.

Chevron and Shell's stake divestment is attributed to the non-passage of the Petroleum Industry Bill  (PIB) and a lack of commitment on the part of the Nigerian government to pursue the completion of the project.

The Olokola LNG project was initiated in 2005. It is located between Ogun and Ondo states. The MOU and Shareholders Agreement were signed in 2005 and 2007 respectively, FID was taken in 2007, and first production was expected two years later but nothing concrete on the project has been done since then.

The PIB, which is a comprehensive legislation on the Nigerian petroleum industry, that seeks to overhaul the country's petroleum legislation was presented by the Nigerian government to the country's legislature. However, the failure of the legislature to pass same into law has created uncertainties in the country's petroleum sector, with major companies said to have freezed further investment pending the passage of the Bill.