* 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 inclosing sales of oil blocks in Nigeria worth up to $1 billionbecause of legal disputes involving potential buyers, industrysources say, highlighting a risk other oil majors could face.
Chevron is joining competitors ConocoPhillips, RoyalDutch Shell, France's Total and Italy's Eni in disposing of stakes in onshore and shallow wateroffshore fields in the Niger Delta region.
OPEC-member Nigeria has the potential to double its 2million-2.5 million barrel per day oil output in the next fiveyears but problems with oil theft, pipeline sabotage andregulatory uncertainty are putting off investment.
Oil majors want to keep hold of the biggest producingfields, 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 remainundeveloped for ten years, notably in the restive Niger Delta.
Chevron has chosen its preferred bidders for the five blocksit put up for sale in June but the deals have not closed becauserival firms have disputed its decision, with one taking the U.S.company to court, sources close to the deals said.
A Chevron spokeswoman said the company did not comment onongoing transactions.
Nigerian firm Brittania-U, run by former Chevron executiveCatherine Uju Ifejika, was the highest bidder at over $1 billionfor the biggest cluster of blocks - OML 52, 53 and 55 - andChevron began discussions with the company over the sale, twobanking sources close to the deal said.
Chevron decided to look at alternative bids afterBrittania-U did not show sufficient evidence it could muster theamount promptly, banking and oil industry sources said.
Brittania-U did not respond to requests for comment.
Chevron then agreed to sell the biggest block, OML 53, toSeplat, which is partly owned by French oil explorer Maurel &Prom and Swiss-based commodity trader Mercuria, whileOML 52 would go to local firm Amni Petroleum and the smallest,OML 55, to Belema Oil, run by a local Delta community.
$1 BILLION
None of the companies responded to request for comment.
A Nigerian federal high court issued an interim injunctionin December stopping Chevron from selling the blocks to Seplatand others after Brittania-U brought action against the U.S.major saying it had already agreed a deal to buy the assets,court documents showed.
Chevron could earn between $700 million and $900 million forthe three blocks, two sources involved in bids said.
The three blocks had proven reserves of 555 million barrelsof oil equivalent, with the biggest block OML 53 holding 310million of those reserves, two oil industry sources said, citinga Chevron memorandum given to bidders.
Court cases can drag on for years in Nigeria and the longerthe delay the less profit oil majors are likely to make from thedeals and the greater the chances the sales could fall throughaltogether.
Such litigation also slows down the potential oil and gasproduction increases that could be felt from new buyersexploiting assets left undeveloped by oil majors.
ConocoPhillips has waited for more than a year to close a$1.6 billion deal with Nigeria's biggest energy company, Oando , for its business in Africa's biggest oilproducer because the local firm has taken more than a year toraise finance.
Oando plans to raise $193 million in a share issue to helpfinance the deal, banking sources said in December, and thecompany has said the acquisition will be completed early thisyear.
Chevron has also agreed to sell two smaller blocks - OML 83and 85 - to Nigerian firm First Exploration and Production witha bid of around $100 million but the deal has not been completedand rival bidders are also considering disputing this deal, thetwo banking sources said. They did not give details of whichcompanies might challenge the sale.
First E&P's Chairman Henry Odein Ajumogobia is a formerforeign affairs minister and its Managing Director AdemolaAdeyemi-Bero spent five year working at BG Group.
Chevron and First E&P declined to comment.
Shell, Total and Eni are selling a combined 45 percent stakein at least four more oil blocks with combined production ofaround 70,000 barrels per day. Bids on these blocks are due nextmonth, sources said.
Shell, the biggest producer in Nigeria, has sold eight oilblocks in the Niger Delta for a total $1.8 billion since 2010and some industry sources believe the Anglo-Dutch major may havethe experience needed to get deals agreed.
"It's not about the highest bid, it's about which buyer hasthe know-how and the connections to get the deals done," oneexecutive at a Nigerian company said.
