Dallas, Texas 06/25/2015 (Financialstrend) – Oil theft, pipeline vandalism and uncertainty over taxes in Nigeria continues to take a toll on Chevron Corporation (NYSE:CVX) prospects in the West African nation. The giant oil company has announced plans to sell its 40% stake in two of the country’s shallow water offshore oil blocks. The selloff is part of the company’s plan to shield itself from the effects of uncertainties in Nigeria amidst the plunging oil prices.
Oil Majors Exiting Nigeria
The proposed sell-off follows on a similar sell off of 40% stakes in offshore oil blocks IML 83 and 85 early in the year, to First Exploration & Petroleum Development Company. Nigeria has experienced an exit of oil majors in the recent past a move that has affected the country’s energy sector.
ConocoPhillips (NYSE:COP) has already offloaded its upstream oil and gas business in the country to Oando a move that has had a ripple effect on other oil majors all looking to divest their operations in the country. Nigeria is not the only market that Chevron Corporation (NYSE:CVX) has shown its back on.
The company has already completed the divestment of its entire stakes in Vietnam, both upstream and midstream assets. PetroVietnam is to take over Chevron Corporation (NYSE:CVX)’s holdings in three offshore blocks as well as stakes in a natural gas pipeline project.
Shedding Of Loss Making Assets
Oil majors are shedding off unwanted assets that have turned sour in terms of returns at the current low oil prices. Chevron Corporation (NYSE:CVX) hopes to increase its liquidity levels while strengthening its balance sheet with the ongoing sell offs.
Chevron is not the only company in the energy sector that has opted to divest its non-core assets due to plunging crude prices. Royal Dutch Shell plc (ADR) (NYSE:RDS.A), as well as ConocoPhillips and Cimarex Energy Co (NYSE:XEC), have also been offloading noncore assets.