By Chris Udochukwu
ABUJA – The federal government on Friday assured of a transparent process as international oil companies including Shell Petroleum Development Company, Nigeria Agip Oil Company, Mobil Producing Nigeria Unlimited, and Equinor are set to divest their investments in 26 oil blocks in Nigeria to indigenous firms.
The Chief Executive, Nigeria Upstream Petroleum Regulatory Commission, Gbenga Komolafe, gave the assurance on Friday during an industry dialogue on divestments by IOCs in Abuja.
Komolafe said the dialogue was organised by the commission “to give insight and guidance, as well as consider due diligence and interrogation on compliance with the laws and processes that govern the proposed divestment of oil and gas assets by international oil companies to indigenous companies.”
He added, “A total of 26 blocks are proposed to be divested. These blocks have an estimated total reserve of 8.211million barrels of oil, 2,699 million barrels of condensate, 44,110 billion cubic feet of associated gas and 46,604 billion cubic feet of non-associated gas. This is a significant contribution to the nation’s hydrocarbon resources.
“Additionally, these blocks contain P3 reserves estimated at 5,557 million barrels of oil, 1,221 million barrels of condensate, 14,296 billion cubic feet of associated gas and 13,518 billion cubic feet of non-Associated Gas.
“It is worth noting that a substantial part of the P3 reserves is located in or near producing assets. This means that a competent successor could easily mature them to 2P reserves.”
The NUPRC boss further stated that the current average production from these blocks was 346,290 barrels per day.
Providing a breakdown on this figure, Komolafe stated that the average oil production from NAOC was 28,018 bpd; MPNU, 159,378 bpd; Equinor, 36,155 bpd; and SPDC, 122,739 bpd.
“But the technical production potential is much higher – standing at 643,054 barrels (NAOC -147,481 bpd, MPNU – 244,268 bpd, Equinor – 39,203 bpd, and SPDC -212,102 bpd).
“These blocks have the potential to significantly boost our national production, which would benefit all stakeholders,” the NUPRC boss stated.
Recall that it was reported on Tuesday that the Federal Government commenced a due diligence meeting for the proposed $2.4bn asset sale by Shell to Renaissance Africa Energy, and announced that it targets to complete the divestment exercise by June this year.
Shell, a British energy major, had announced in January that it had reached an agreement to sell its Nigerian onshore subsidiary – Shell Petroleum Development Company of Nigeria Limited, to Renaissance for $2.4bn after about a century of operations in the Niger Delta.
Renaissance, a consortium of five companies comprising four exploration and production companies based in Nigeria and an international energy group, confirmed the deal.
Shell had stated in a statement that the “completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions.”
Renaissance had also confirmed the signing of what it called a landmark transaction with Shell Plc to acquire its entire shareholding in the Shell Petroleum Development Company of Nigeria Limited.
Renaissance is a consortium consisting of ND Western Limited, Aradel Holdings Plc, the Petrolin Group, FIRST Exploration and Petroleum Development Company Limited, and the Waltersmith Group.
Parties in the deal and officials from the Nigerian Upstream Petroleum Regulatory Commission had commenced a due diligence dialogue in Abuja on Monday, where the NUPRC boss told journalists on the sidelines of the event that the target exit period for the process would be in June.
At the divestments dialogue on Friday, he stated that the regulatory goal of the commission was to ensure that parties in the divestment process conform to the approved divestment guidelines.
“We aim to ensure that the companies that take over these blocks have the necessary financial resources and possess the technical expertise required to responsibly manage the blocks throughout their lifecycle in accordance with good asset stewardship practices.
“Furthermore, we must ensure that the inherent environmental, host communities and end-of-life liabilities, i.e. decommissioning liabilities, are accurately identified and assigned to the party best equipped to bear the associated risks.
“This necessitates a comprehensive understanding of regulatory requirements, industry best practices, and the unique challenges associated with oil and gas operations,” Komolafe stated.
Komolafe said President Bola Tinubu was committed to creating a favourable investment environment in the upstream petroleum industry.
“As part of this initiative, the President has directed the xommission to ensure a smooth entry and exit framework for the ongoing divestments by IOCs.
“To this end, we have implemented robust measures to streamline regulatory procedures and eliminate unnecessary barriers to investment,” he stated.
The IOCs and their indigenous counterparts in the sector commended the Federal Government for the initiative, and expressed hope that the divestment processes would be completed between June and August as targeted.
The General Manager, SPDC Assets and Deputy Managing Director, SPDC Ltd, Wessel de Haas, and his team, as well as representatives from Renaissance, welcomed the dialogue, and declared their readiness to work with the NUPRC in making it successful.(Punch)
