Chevron confirms withdrawal from Olokola LNG project

CHEVRON Nigeria Limited, operator of the Nigerian National Petroleum Corporation/Chevron Joint Venture, has officially confirmed its withdrawal from the Olokola Liquefied Natural Gas project.

There had been speculations that the company might pull out of the Olokola LNG project but no official confirmation was forthcoming until now.

The General Manager, Policy, Government and Public Affairs, Chevron Nigeria, Mr. Deji Haastrup, said in a statement on Wednesday that the withdrawal from the project took effect from July 31, 2013.

Citing delays in the Final Investment Decision for the project, the oil major lamented that efforts over the last eight years to mature the project had not resulted in the FID.

In view of this, it said it took the decision to withdraw from the project based on the review of its investment portfolio.

 “The business decision to withdraw from the OKLNG is based on a review of our investment portfolio, the lack of progress on the project and a reprioritisation of resources to focus on growing domestic gas supply,” the company said in the statement.

The OKLNG project company was formed in 2007 by NNPC, BG, Chevron and Shell. BG and Shell withdrew from the project in June 2012 and July 2013, respectively.

“The NNPC was duly informed of Chevron’s decision to withdraw and the divestment process is being managed in accordance with the provisions of the shareholders’ agreement governing the project,” the statement added.

Chevron originally had 19.5 per cent equity in the project, but this increased to 22.74 per cent after BG’s withdrawal.

“Chevron remains fully committed to Nigeria and continues to pursue its investments in the country’s oil and gas industry,” the statement added.

The Olokola LNG project is located between Ogun and Ondo states and the plan of the project was for gas producers/owners to send natural gas to the facility, where it would be converted to LNG for a fee and pumped into owner ships for sale.

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