‘Government to decide new owners of divested oil assets’

The Federal Government has said that it will carefully scrutinise oil companies bidding for the takeover of assets that Shell and other oil majors are divesting in the country.

Shell and ExxonMobil had earlier indicated their interests to divest from onshore and shallow water assets in the country.

Speaking at separate business meetings with top management of Chevron and Schlumberger at their headquarters, in Houston, Texas, United States (US), the Minister of State for Petroleum Resources, Timipre Sylva said the Federal Government would carryout due diligence in the selection and eventual approval of any company taking over the assets from which these companies intend to divest.

He stated that the previous practice whereby companies were allowed to purchase strategic investments without verifying their capacity to operate such assets would no longer be tolerated.

“In the past, companies were just allowed to buy assets that they had no capacity to operate. We would no longer allow that to happen again because Government is the ultimate loser. If they are not able to operate such assets optimally, government won’t be able to generate revenue from such assets. So we are going to do our best to ensure that we get the best value from these assets,” Sylva said.

He told Chevron and Schlumberger teams that government would create the enabling environment for them to increase their investments in Nigeria, adding that with the passage of the Petroleum Industry Act (PIA), Nigeria will increase incentives for investments in the oil and gas sector of the economy.

“With PIA, we now have the enabling laws that protect and make the operating environment more attractive. With the passage of the PIA, there are a lot of interests in the oil and gas sector in Nigeria today. The responses we have received from investors so, far, is quite good. Everybody is quite happy,” Sylva said, adding that the Nigerian government while willing to encourage new investors will open its doors first to those who already have business and investments in the country.

The minister who also spoke on cost optimisation, security of oil and gas assets, domestic gas utilisation also called for more investments in the sector.

At a breakfast meeting organised by the African Energy Future, Sylva urged the African continent to wake up to find solution the African problem or the word would leave Africa behind.

Sylva who spoke on Wednesday morning at the Hyatt Regency Hotel, Houston, said with the Omicron virus ban placed on Africa and the rush for energy transition, the continent leaders need to look for urgent financing solution if the continent will continue to play key roles in the hydrocarbon sectors.