In a recent revelation, it has been disclosed that Nigerian oil companies have successfully acquired approximately 26 oil mining licenses within the Niger Delta basin area over the last ten years. This information was unveiled by Engr. Simbi Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board, during the 2023 Petroleum and Natural Gas Senior Staff Association Energy and Labour Summit held in Abuja on Wednesday.
Wabote emphasized that several divestments are currently in progress, including the plans by major players such as Shell and ExxonMobil to divest oil and gas assets worth billions of dollars. He also highlighted Eni’s announcement from September, stating that an agreement with Oando Plc had been reached for the sale of NAOC interests in six onshore blocks and the Okpai gas power plant in Delta State.
Wabote stressed that these divestments should not be viewed negatively; instead, they present an opportunity to leverage the local capacities and capabilities developed through the implementation of local content in the upstream sector. He outlined numerous benefits that would arise from these divestments, such as the injection of new capital, the revitalization of divested assets, and an increase in crude oil production through technology investments by the acquiring companies.
Additionally, the divestments would create direct and indirect employment opportunities for indigenous companies and their service providers.
Wabote noted that these divestments affirm the readiness of Nigerians and indigenous companies to participate in the global energy sector, with the technical, managerial, and financial capabilities to compete at an international level.
He also highlighted various challenges associated with divestment exercises, including delays in obtaining necessary regulatory approvals, substantial interests from various groups (political, legal, communities, and labor), potential disruptions to oil and gas production, job losses, and access to the latest technology, especially if new investors lack technical expertise or support from original equipment manufacturers.
Managing legacy issues or liabilities related to the environment, communities, and social commitments, as well as addressing pressure on new investors to recoup their investments and meet financial requirements, were also identified as challenges.
Wabote assured that the Nigerian Content Development and Monitoring Board would continue to collaborate with industry stakeholders to establish regulations that ensure the expanding presence of indigenous oil and gas production companies does not result in a reduction in Nigerian content compliance.