According to three sources within the company, ExxonMobil will not be renewing its lease on its large offices in the upscale Lekki district of Lagos, which has been in place for 33 years and is set to expire on Friday. This decision comes as part of Exxon’s efforts to reduce its operations in Nigeria. Other major oil companies like Shell, TotalEnergies, and Eni have also tried to exit the oil-rich Niger Delta region in recent years due to Security concerns but have faced obstacles in doing so because of regulatory challenges.
The company is on the brink of finalising the sale of its land and shallow-water assets to Seplat Energy, a local oil company, following an agreement made in 2022. The Nigerian state oil firm NNPC and Exxon’s local unit signed a deal, which is seen as a step towards gaining regulatory approval in the local oil sector. They reassured that their commitment to Nigeria remained steadfast, and it is evident in their relocation to a state-of-the-art office, stated Oge Udeagha, spokesperson for the Nigerian division of the company.
Workers will be transferred from their 12-story to 6-story office building.
Their workforce remains their top priority, and they assure the people that there have been no changes in their staffing. Their decision to move to smaller offices and refrain from making new investments shows the company’s commitment to reducing its presence in Nigeria despite the government’s efforts to attract multinational oil companies. They are transferring employees from the 12-story Mobil House, which costs $10 million per year to lease, to a smaller six-story office building located 22 kilometres away in the upscale neighbourhood of Ikoyi.
This new building is specifically designed to accommodate half of the staff from the original offices. A company employee confidently revealed that the new office clearly indicates the company’s ambitious future intentions in Nigeria. ExxonMobil has decided to sell its assets to Seplat Energy and shift its attention to its deep water operations in Nigeria under its local subsidiaries Esso Exploration and Production Nigeria (Deepwater). However, since assuming office last year, Nigerian President Bola Tinubu has emphasised the importance of attracting investments and has instructed for divestment agreements to be resolved promptly.
Government must streamline regulations and resolve agreements promptly.
Creating a conducive business environment in Nigeria is not just important, but essential for attracting and retaining multinational corporations like ExxonMobil. The ability of the government to streamline regulations, resolve divestment agreements promptly, and provide a stable and secure operating environment is crucial for foreign companies looking to invest in the country. By demonstrating a commitment to supporting businesses and fostering economic growth, Nigeria can position itself as an attractive destination for foreign investment, leading to job creation, Technology transfer, and overall economic development.
Also, ExxonMobil’s decision to downsize its Nigerian operations and relocate to smaller, more cost-effective office spaces is a strategic move that reflects the changing dynamics of the oil industry. Companies must adapt to remain competitive and sustainable in a volatile market environment. By consolidating its operations and reducing overhead costs, ExxonMobil is improving operational efficiency and demonstrating its ability to navigate challenging market conditions. This shift in strategy highlights the importance of proactive decision-making and the need for companies to continuously assess and adjust their business model to align with market trends.
Related Article: Refuse Shell’s oil divestment plan — Activist
While the downsizing of their operations in Nigeria may raise concerns about the company’s long-term presence in the country, it also presents an opportunity for local companies like Seplat Energy to expand their footprint in the oil sector. As it shifts its focus to deep water operations under its local subsidiaries, it opens the door for indigenous companies to play a more significant role in the industry. This transition underscores the importance of fostering a competitive and diverse business landscape that encourages innovation, collaboration, and growth.