ExxonMobil is downsizing its operations in Nigeria, Africa’s largest oil-producing country, as part of a broader strategy to scale down its presence in the region.
The oil giant is vacating its expansive offices in Lagos with the expiration of a 33-year lease this Friday, according to insiders who spoke to Reuters.
This move follows similar actions by other oil majors such as Shell, TotalEnergies, and Eni, which have attempted to exit Nigeria’s oil-rich Niger Delta in recent years due to security concerns.
However, these efforts have often been hindered by regulatory challenges. In January, Shell announced the sale of its 30% stake in the Shell Petroleum Development Company (SPDC) to a consortium of primarily local companies for up to $2.4 billion.
ExxonMobil, Eni, and Equinor have also divested assets in Nigeria in recent years to focus on newer and more lucrative operations elsewhere.
ExxonMobil’s plan to sell its land and shallow-water assets to local oil firm Seplat Energy, agreed upon in 2022, is nearing completion. An agreement signed on Wednesday between the Nigerian state oil firm NNPC and Exxon’s local unit is seen as a “precursor to regulatory approval,” according to the local oil sector regulator.
Despite the government’s efforts to attract multinational oil firms, Exxon’s downsizing signals a shift in strategy.
The company is relocating staff from the 12-floor Mobil House in Lekki, which reportedly costs $10 million annually in lease fees, to a six-floor office building 22 kilometers away in the upscale Ikoyi area.
This new office is designed to accommodate half the personnel previously working at the former location.
Having agreed to the disposal to Seplat Energy, ExxonMobil has stated it will focus on its deepwater assets in Nigeria through its local units, Esso Exploration and Production Nigeria and Esso Exploration and Production Nigeria (Deepwater).
Oil companies are scaling back operations in Nigeria due to several reasons, including oil theft, which has undermined the profitability and sustainability of their ventures.
Recently, ExxonMobil also announced its exit from Equatorial Guinea after nearly 30 years, further highlighting its strategic pivot.
