Nigerian oil companies have obtained approximately 26 oil mining licenses in the Niger Delta basin over the past decade.
According to The PUNCH, this was disclosed by the Executive Secretary of the Nigerian Content Development and Monitoring Board, Engr. Simbi Wabote.
He stated this during the 2023 Petroleum and Natural Gas Senior Staff Association Energy and Labour Summit in Abuja.
Engr. Wabote pointed out that some of the divestments in the sector are initiated by major players such as Shell and ExxonMobil, who plan to sell oil and gas assets worth billions of dollars.
In addition, Eni announced in September an agreement with Oando Plc for the sale of the Nigerian Agip Oil Company’s interests in six onshore blocks and the Okpai gas power plant in Delta State.
Wabote emphasized that oil asset divestments do not necessarily carry negative connotations. Instead, they offer opportunities for local capacities and capabilities developed through local content implementation to be harnessed in the upstream sector.
He outlined several advantages stemming from divestments, including the injection of new capital, the revitalization of divested assets, and increased crude oil production through technological investments by acquiring firms.
Furthermore, divestments create direct and indirect employment opportunities for indigenous companies and their service providers.
Wabote stressed that these divestments signify the maturity and technical, managerial, and financial capabilities of Nigerians and indigenous companies in the oil and gas sector, enabling them to compete effectively on an international scale.
He also noted the role of financial institutions in the transactions, facilitating efficient capital deployment and capacity building through international loan syndication.
This extends to legal services, insurance, government relations, employee relations, community liaison, and other areas.
However, Engr. Wabote acknowledged challenges associated with divestment exercises, such as the time required for regulatory approvals and interests from various groups, including political, legal, communities, and labor.
Other challenges encompass potential disruptions in oil and gas production, job losses, access to the latest technology, legacy issues related to the environment, communities, and social commitments, as well as the pressure on new investors to recoup investments within financial constraints.
Wabote assured that the Nigerian Content Development and Monitoring Board would continue to collaborate with industry stakeholders to establish regulations that ensure the growing stakes of indigenous oil and gas production companies do not compromise Nigerian content compliance.
