Shell, ExxonMobil, others set to divest from oil blocks in Nigeria

The Nigerian authorities on Friday stated 4 Worldwide Oil Firms (IOCs) will divest from a complete of 26 oil blocks within the nation.

The Nigerian Upstream Petroleum Regulatory Fee (NUPRC) Chief Govt, Gbenga Komolafe, stated the proposed oil blocks belong to Nigerian Agip Oil Firm, ExxonMobil (Mobil Producing Nigeria Limitless), EQUINOR and Shell (Shell Petroleum Improvement Firm of Nigeria Restricted).

Mr Komolafe disclosed this in the course of the business dialogue on divestment in Abuja on Friday.

He stated Oando is in search of to amass NAOC belongings from Eni whereas Seplat is bidding to take over Mobil belongings.

The Equinor divestment to Chappal features a stake within the prolific Agbami oil discipline and Renaissance to amass the onshore belongings of Shell.

He defined that these blocks have an estimated complete reserve of 8.211 million barrels of oil, 2,699 million barrels of condensate, 44,110 billion cubic ft of related gasoline and 46,604 billion cubic ft of non-associated gasoline.

This, he stated, is a big contribution to the nation’s hydrocarbon sources.

Moreover, Mr Komolafe stated these blocks comprise P3 reserves estimated at 5,557 million barrels of oil, 1,221 million barrels of condensate, 14,296 billion cubic ft of related gasoline and 13,518 billion cubic ft of non-associated gasoline.

“It’s value noting {that a} substantial a part of the P3 reserves is positioned in or close to producing belongings. Which means a reliable successor might simply mature them to 2P reserves.

“Moreover, the present common manufacturing from these blocks is 346,290 barrels per day (bpd) (NAOC-28,018 bpd, MPNU-159,378 bpd, EQUINOR-36,155 bpd and SPDC-122,739 bpd).

“However the technical manufacturing potential is way greater – standing at 643,054 barrels (NAOC-147,481 bpd, MPNU-244,268 bpd, EQUINOR-39,203 and SPDC-212,102 bpd),” he stated.

He added that these blocks have the potential to considerably increase nationwide manufacturing, which might profit all stakeholders.

“Our regulatory purpose is to make sure that events within the divestment course of conform to the accepted divestment tips. We intention to make sure that the businesses that take over these blocks have the required monetary sources and possess the technical experience required to responsibly handle the blocks all through their lifecycle in accordance with good asset stewardship practices.

“Moreover, we should make sure that the inherent environmental, host communities and end-of-life liabilities, i.e. decommissioning liabilities, are precisely recognized and assigned to the occasion greatest outfitted to bear the related dangers.

“This necessitates a complete understanding of regulatory necessities, business greatest practices, and the distinctive challenges related to oil and gasoline operations,” he stated.

He added that President Bola Tinubu is dedicated to making a beneficial funding surroundings within the upstream petroleum business.

As a part of this initiative, he stated the president has directed the fee to make sure a easy entry and exit framework for the continued divestments by IOCs.

“To this finish, we now have applied strong measures to streamline regulatory procedures and remove pointless limitations to funding.

“Consistent with the presidential directive, the fee has developed a divestment framework consisting of seven cardinal pillars along with the extant petroleum legal guidelines, to information the evaluation of functions for Ministerial consent by the divesting entities,” he added.

Moreover, he famous that the divestment framework is aimed toward ascertaining compliance with extant petroleum legal guidelines and the assignees’ capability to imagine the accountability of creating the belongings acquired.

To realize the divestment framework targets, he stated the fee has engaged two main world oil and gasoline decommissioning consultants, S&P World Commodity Insights (SPGCI) and Boston Consulting Group (BCG) to hold out due diligence on the belongings to be divested.

“One of many targets we hope to attain on this workshop is to make sure that the environmental, host communities, and end-of-life liabilities related to these belongings don’t turn out to be the monetary accountability of the Federal Authorities of Nigeria.”

To realize this, he famous that the fee is proposing that the divesting entities ought to both comply with the grant of ministerial consent to the divestments, on the situation that they may retain the liabilities till the fee’s investigation is concluded and the liabilities are allotted to the right occasion.

On this case, he stated the divesting corporations shall be required to concern an endeavor to retain the liabilities till affirmation of the discharge by the fee of all or a part of the retained liabilities.

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Alternatively, he stated the divesting entities can agree that ministerial consent won’t be granted till the fee has recognized and assigned all liabilities to the succesful occasion.

“On this state of affairs, the divesting entities may even be required to concern a waiver, waiving their rights to deemed consent as supplied in Part 95 (7) (b) of the PIA.

“Please notice that the fee expects the divesting events to point their most well-liked choice and concern the relevant instrument inside two weeks of the date of this workshop. I wish to make it unequivocally clear that the NUPRC is devoted to making sure that funding processes are easy, clear, and environment friendly.

“The requirement to signal an endeavor or waiver is solely aimed toward stopping any unwarranted monetary obligations from falling again on the Federal Authorities of Nigeria. I guarantee you that the fee is keen to shut the divestments throughout the shortest timeline upon the receipt of any of the required devices,” he stated.