Divestment by IOCs big achievement for Nigeria, NCDMB says

• Insists crude oil theft not sole reason for nation’s low production
• Indigenous companies violating extant regulations, Wabote says

Nigerian Content Development Monitoring Board (NCDMB), yesterday, said the current wave of divestment by international oil companies (IOCs) from the country is a plus, especially for development of local content.

The agency projected that the share of local firms in crude oil production could reach 30 per cent or more in a short while, going by rate of the acquisition.

Speaking at a breakfast meeting with editors of newspapers and directors of broadcast stations, NCDMB’s Executive Secretary, Simbi Wabote, said the reasons for Nigeria’s low crude production is beyond stealing by vandals.

While admitting that indigenous producers now contribute over 15 per cent of the nation’s oil output, Wabote raised the alarm on violation of extant regulations by independent oil companies.

Going by the push away from fossil fuel, most international oil companies have divested billions of dollars worth of assets from Nigeria, especially in shallow water. Seplat Plc and Oando Plc are currently moving to take over assets of ExxonMobil and Eni.

“The ongoing and planned divestments are big accomplishments for Nigerian content development. They are bold statements that Nigerian indigenous operating companies have come of age and have acquired the technical, managerial, and financial capabilities to play in the big league.

“We are proud that we have moved from near zero participation in the oil and gas sector to the point that our indigenous operators such as Seplat, Aiteo, Eroton, and others are now responsible for 15 per cent of our oil production and 60 per cent of our domestic gas supply,” he said.

Seplat Plc is hoping to conclude acquisition of the entire share capital of Mobil Producing Unlimited (MPNU) from ExxonMobil Corporation, a deal that would reportedly triple Seplat’s production and add 95,000 barrels of oil equivalent per day, Wabote said.

He admitted that Eni signed an agreement last month to sell Nigerian Agip Oil Company (NAOC) Ltd to Oando Plc, a deal which would include NAOC’s four onshore blocks: the Okpai 1 and 2 power plants, and two onshore exploration leases.

Reportedly, the transaction would double Oando’s reserves to 996 million barrels of oil equivalent. Wabote noted that implementation of the oil majors’ strategic move to sell down their onshore assets in Nigeria and concentrate on offshore operations, where they retain a competitive advantage and contend with minimal human interferences, remained a key reason for the current divestment.

“The implication is that we should expect other majors to soon offer their onshore assets for sale, while many other Nigerian independents will have a shoe-in,” he added.