Over the past ten years, 26 oil mining licences in the Niger Delta basin have been purchased by Nigerian oil companies.
The Punch reported that the executive secretary of the Nigerian Content Development and Monitoring Board, Engr. Simbi Wabote, said this on Wednesday at the Abuja Energy and Labour Summit for the 2023 Petroleum and Natural Gas Senior Staff Association.
He claimed that among the divestitures currently planned were those by Shell and ExxonMobil to sell oil and gas assets valued at billions of dollars, as well as the agreement Eni announced in September with Oando Plc for the sale of NAOC interests in six onshore blocks and the Okpai gas power plant in Delta State.
He stressed the fact that selling off oil assets is not necessarily a bad thing because it gives the upstream industry a chance to utilize the local capacities and capabilities that have been built via the use of local content.
Wabote cited a number of benefits that would result from divestitures, including the infusion of fresh cash, the revitalization of disposed assets, and an increase in crude oil production due to the acquiring companies’ investments in technology.
The establishment of direct and indirect employment possibilities by indigenous businesses and their service providers is another obvious benefit.
He emphasized that the divestments show that Nigerians and indigenous businesses have matured and have the technical, managerial, and financial skills necessary to compete in the “big league.”
“Our financial institutions’ participation in the transactions represents a means of effective capital deployment and capacity building on loan syndication on an international scale,” he continued.
“Legal services, insurance, government relations, employee relations, community involvement, and other industries are also affected by this.
The NCDMB director also emphasized the difficulties that were encountered throughout the divestiture activities, in addition to the opportunities.
He claimed that the difficulties were caused by the amount of time needed to obtain the appropriate regulatory permits as well as the significant concerns of numerous parties, including the political, legal, community, and labour sectors.
He also emphasised the need for new investors to make timely returns on their investments in order to pay off loans and meet other financial obligations, as well as the challenges of managing legacy problems or liabilities connected to the environment, communities, and other social commitments.
The head of the NCDMB gave the assurance that the Board would keep working with industry stakeholders to enact laws that would make sure that the expanding reach and stakes of domestic oil and gas production businesses would not result in a decline in Nigerian content compliance.
