Legal challenges delay Chevron's $1 bln Nigeria oil block sales

Mon Jan 13, 2014 9:07am EST
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* Delays could limit sale profits, scupper deals

* Shell, Total, Eni, ConocoPhillips also divesting

* Nigeria firms, partnered with foreign, bidding

By Joe Brock

ABUJA, Jan 13 (Reuters) - Chevron faces delays in closing sales of oil blocks in Nigeria worth up to $1 billion because of legal disputes involving potential buyers, industry sources say, highlighting a risk other oil majors could face.

Chevron is joining competitors ConocoPhillips, Royal Dutch Shell, France's Total and Italy's Eni in disposing of stakes in onshore and shallow water offshore fields in the Niger Delta region.

OPEC-member Nigeria has the potential to double its 2 million-2.5 million barrel per day oil output in the next five years but problems with oil theft, pipeline sabotage and regulatory uncertainty are putting off investment.

Oil majors want to keep hold of the biggest producing fields, offshore assets and key pipelines and export terminals. But they are disposing of less profitable onshore blocks and fields that the government could strip from them if they remain undeveloped for ten years, notably in the restive Niger Delta.

Chevron has chosen its preferred bidders for the five blocks it put up for sale in June but the deals have not closed because rival firms have disputed its decision, with one taking the U.S. company to court, sources close to the deals said.   Continued...