British Gas (BG) Exploration and Production is pulling out of Nigeria’s oil and gas sector in March 2011
Despite the investment of over $500 million in its exploration activities on the offshore blocks OPLs 332, 286-DO and 284-DO since 2004, British Gas (BG) Exploration and Production is pulling out of Nigeria’s turbulent oil and gas sector in March 2011.
BG Nigeria is 100 per cent owned by BG UK Plc. The group was a major partner in the multi-billion dollar Olokola (OK) LNG project in Ogun and Ondo states before it indicated plans to divest in August, last year.
As part of moves to close its operation in the country, sources said that the appointments of over 100 remaining Nigerian employees of the company would be terminated as from next month after they receive severance packages.
BG was said to have commenced discussions with the National Petroleum Investment Services (NAPIMS) about its divestment plans.
Also, a 10-man transitional management team, headed by the company’s Managing Director, Mr. Ademola Adeyemi-Bero, had been directed by the parent company, BG Group, United Kingdom to oversee an orderly liquidation process and commence winding-up proceedings before the end of the year.
“BG Nigeria is 100 per cent owned by BG UK Plc, therefore an official announcement by BG Group informing the London Stock Exchange about its divestment from Nigeria is imminent” the source stated.
The company had in September last year sacked 51 of its employees in a restructuring exercise, Paul Arinze, the company’s Corporate Affairs General Manager, said was “about responding to global changes”.
It was gathered that since the beginning of this year, senior Nigerian managers have been routinely laid-off as part of the company’s divestment strategy to exit the country before next year’s general elections.
With the recent developments in the company, BG’s General Manager, Business Development and Strategy, Mr. Femi Bajomo, was reported to have resigned from the company to join Afren Plc as Regional Director, Business Development.
BG, which commenced business activities in Nigeria in 2004, has gradually reduced its entire expatriate personnel which peaked at 60 to only two expatriates in Lagos with the rest recalled to its Thames Valley Park, Reading Head Office in the United Kingdom.
Business activities at BG’s Falomo, Ikoyi, Lagos head office in Lagos have considerably slowed down with three out of its four-floor building completely empty, due to the ongoing divestment process.
While announcing the divestment from the OK LNG project last year, Frank Chapman, Chief Executive Officer of the group, said: “We are switching proprieties to development of projects elsewhere, most notably the expansion of our new assets in Australia. At the appropriate time, there will be further opportunities in Nigeria. For today, it’s a low priority.”
In fact, the $15 billion investment of the group in Australian LNG, part of the reasons OK LNG was dumped, was approved yesterday.
BG Group, together with Chevron Corporation, Royal Dutch Shell Plc and the Nigerian National Petroleum Corporation (NNPC), had planned to build a liquefied natural gas plant at Olokola in Ogun State, a project now abandoned due to stiff opposition from Niger Delta leaders.
Feed gas for the OK LNG project was planned to be primarily sourced and transported via offshore from oil and gas fields located in the Niger Delta to the proposed OK LNG plant site along the cost of Ogun State.
Aside from the company’s interest in the OK LNG project, BG Group is the operator/ technical partner of Nigeria’s offshore blocks OPLs 332, 286-DO and 284-DO.
Industry experts claimed that unlike Shell, BG Group Plc may be hard pressed to find interested and ready buyers for its assets which are not viable wells despite the company’s significant expenditure of over $500 million in its exploration activities on the offshore blocks to date.
BG Group is an acclaimed world leader in natural gas with strategy focused on connecting competitively recourses to specific, high-valued markets.
The group is active in more than 25 countries of the five continents and has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transportation and distribution and power generation business interests.
When contacted, Paul Arinze, General Manager, Corporate Affairs, denied that the company has commenced winding-up process, adding that the company has no intention of leaving the country.
“I do not know where you got the information, its incorrect; the company has no reason to leave the country. We are not closing our business in Nigeria”, he stated.
While he admitted that some employees have been disengaged from the company, Arinze explained that the disengagement was not targetted at Nigerians working in the company.
According to him, BG has offered some Nigerians the opportunity to work overseas and impacted positively in the development of its employees.