BY CHIKA OKEKE, Abuja
Committed to increasing crude oil production, the Nigerian Content Development and Monitoring Board (NCDMB) has disclosed that the planned sale of crude oil assets by some international oil and gas companies will bolster Nigeria’s economy and create jobs.
The Executive Secretary of NCDMB, Engr. Simbi Wabote stated this on Wednesday at the 2023 Petroleum and Natural Gas Senior Staff Association (PENGASSAN) Energy and Labour Summit in Abuja, with the theme: “Divestments in Oil and Gas: the Challenges, Opportunities, and Implications to the Industry in Nigeria.”
Some of the assets currently targeted for acquisition are Shell and ExxonMobil oil and gas fortunes worth billions of dollars, as well as the sale of NAOC interests in six onshore blocks and Okpai gas power plant in Delta State.
Presidential Diary reports that Eni had announced in September that it reached an agreement with Oando PLC for the sale of NAOC assets.
Referencing the AfricaReport magazine, Wabote stated that about 26 oil mining licenses had been divested or acquired by oil and gas companies in the Niger Delta area in the past decade.
He disclosed that divestments of oil assets are not necessarily negative, but it would rather provide opportunities to highlight the local capacities that were developed through the implementation of local content in the upstream sector.
Wabote highlighted several opportunities that would be accrued from divestments such as the injection of new capital, rejuvenation of divested assets, and increase in crude oil production by the acquiring firms.
Other benefits are the creation of direct and indirect employment opportunities by the indigenous companies and their service providers.
He pointed out that the divestments confirmed that Nigerians and indigenous companies have been in operation for long and have acquired the technical, managerial and financial capabilities to participate in bigger deals.
Wabote said: “The involvement of our financial institutions on the transactions represent means of efficient capital deployment and capacity building on loans syndication on an international scale.
“This is also applicable to legal services, insurance, government relations, employee relations and community liaison.”
Aside the opportunities, the NCDMB boss highlighted the challenges encountered in the divestment exercise, which he said revolved around obtaining the needed regulatory approvals and the substantial interests from various groups covering political, legal, communities and labour.
Wabote listed other challenges as the disruption of oil and gas production, job losses and ability to learn new technologies if the new investors lacked the technical expertise or have no support from original equipment manufacturers.
“There are also issues around how to manage legacy issues or liabilities related to the environment, communities, and other social commitments and pressure on new investors to recoup investments on time to offset loans and address other financial requirements.” he added.
He promised that the board would continue to partner with industry stakeholders to institute regulations that would ensure that the increased footprints and stakes of indigenous oil and gas production companies would not lead to a reduction in Nigerian content compliance.
Wabote reiterated its partnership with PENGASSAN to reshape the future Nigeria’s energy industry irrespective of the changes and challenges.
BY CHIKA OKEKE, Abuja