The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has unveiled plans for the transfer of ownership of 26 oil blocks, containing a total reserve of 8.211 million barrels of oil, from International Oil Companies (IOCs) to indigenous companies.
Announcing this development at the Industry Dialogue on IOCs Divestment of Oil and Gas Assets in Abuja, Mr. Gbenga Komolafe, the Chief Executive of NUPRC, highlighted that the commission had engaged two prominent global oil and gas decommissioning consultants to conduct thorough due diligence on the proposed divestment.
This move aims to ensure compliance with regulatory laws and processes governing the divestment of oil and gas assets, as emphasized during the workshop organized by NUPRC.
Among the notable acquisitions, Seplat is set to acquire Mobil Oil Producing Nigeria Unlimited (MPNU), Oando is in line to acquire Nigeria Agip Oil Company (NAOC), Chappal Energies is eyeing Equinor, and Renaissance is positioned to acquire Shell Petroleum Development Company (SPDC).
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Mr. Komolafe further outlined the significant reserves within these blocks, estimating 8.2 million 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. He emphasized the potential for these reserves to substantially contribute to the nation’s hydrocarbon resources.
Moreover, Mr. Komolafe pointed out that a considerable portion of these reserves lies within or near existing producing assets, indicating the opportunity for a competent successor to mature them further. The current average production from these blocks stands at 346,290 barrels per day (bpd), with a technical production potential of 643,054 barrels per day.
To ensure a seamless transition, leading global oil and gas decommissioning consultants, including S&P Global Commodity Insights (SPGCI) and Boston Consulting Group (BCG), will collaborate with the Commission. They will assist in defining end-of-field life and abandonment legacy liabilities, managing operational risks, estimating total onshore decommissioning CAPEX liabilities, and ensuring compliance with divestment guidelines.
Mr. Komolafe reiterated the Commission’s regulatory goal to uphold approved divestment guidelines and ensure conformity among all parties involved in the divestment process.
Addressing the divestment framework, Mr. Enorense Amadasu, the Executive Commissioner for Development & Production at NUPRC, outlined two options for divestments, emphasizing the objectives and conditions associated with each.
Mrs. Olayemi Anyanechi, the Commission’s Secretary and Legal Adviser, detailed Option A, which involves ministerial consent contingent upon entities retaining liabilities until the conclusion of the commission’s investigation and allocation of liabilities.
Alternatively, Option B requires ministerial consent only after the commission has identified or assigned all liabilities to capable parties, with divesting entities waiving their rights to deemed consent as providers.
The transparent and clear options proposed by NUPRC in the divestment process garnered praise from industry stakeholders, including the Chairman of the Oil Producers Trade Section (OPTS), Osagie Okunbor, and the Chairman of the Independent Petroleum Producers Group (IPPG), Abdulrazaq Isa.
Representatives from Equinor, Seplat, Agip, and other parties commended the commission for its efforts and clarity, pledging to provide constructive feedback for the successful execution of the divestment process.
