- Major oil firms are deserting Nigeria due to insecurity and vandalism of the pipelines which wreak havoc on the environment
- Many oil companies are leaving to safer havens like Sao Tome and Principe where they have obtained licenses to operate
- Nigeria said one of the challenges facing it is the erosion of trust by major IOCs and that it’s working tediously to restore confidence in the oil sector
President Muhammadu Buhari has approved the 100 per cent acquisition of the whole share capital of Mobil Oil Producing Nigeria Unlimited by Seplat energy Offshore Limited.
According to a statement by President Buhari Special Adviser (Media and Publicity), Femi Adeshina, Mr Preaident authorized the acquisition in his capacity as Minister of Petroleum and is geared towards attracting foreign direct investment into the country.
The statement also conveyed Mr. President’s directives to ExxonMobil and Seplat to mitigate all environmental and abandonment liabilities.
Reasons oil companies are leaving
This comes as the Minister of State for Petroleum Resources, Timipre Sylva said the oil firms are leaving Nigeria due to the volatile environment which impacts negatively on their operations.
Sylva stated that Nigeria’s situation had become dangerous because of the myriad of challenges affecting the oil sector.
He noted that while Nigeria is trying to attack the challenges, the destruction perpetrated by vandals was destroying investors’ confidence in the oil and gas industry.
According to the ex-Bayelsa state governor, Nigeria’s biggest problem is the insecurity of the pipelines, saying that there is a lot of pollution due to oil theft and pipeline vandalism which has put Nigeria in a tough situation.
Sylva said the oil firms feel that the industry is becoming very dangerous and a major polluter, saying that the vandals who rupture the pipelines set up unregulated illegal refineries and are seriously degrading the environment.
The minister stated that it is the goal of Nigeria to restore the country as a top oil producer in the world and tackle the menace of oil theft.
According to reports, one of the major reasons the oil firms are also divesting from Nigeria is due to the loss suffered by vandalism and the global focus on renewable energy.
Nigeria only attracted $3 billion which is about 4 per cent of the $70 billion committed to new projects in Africa between 2015 and 2019.
According to reports, Chevron Texaco and ExxonMobil as well as EER, a Norwegian oil firm, have secured oil licenses in Sao Tome and Principe where they invested about $700 million.
List of oil companies leaving Nigeria
Royal Dutch Shell
ExxonMobil
Total
Eni
Chevron
Texaco
Nigeria pays international oil companies $3.7 billion, owes $972 million
Legit.ng reported that Nigeria has paid international oil companies the sum of $3.7 billion as part of its cash call areas to five international oil firms with a total of $971.8 million still outstanding.
According to the some reports, data from the Nigerian National Petroleum Company (NNPC) Limited shows that the five international companies are Shell Petroleum Development Company, Mobile Producing Nigeria, Chevron Nigeria, Total Exploration and Production Nigeria, and Nigeria Agip Oil Company.
Reports further say that Nigeria’s cash call areas to the companies stood initially at $4.689 billion prior to the reduction to the current amount of $971.8 million.
Meanwhile, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has affirmed that the status quo remains in respect of ExxonMobil/Seplat Energy share acquisition.
Responding to media enquiries on latest development about the transaction, the Chief Executive of the NUPRC Engr. Gbenga Komolafe clarified that the Commission, in line with the provisions of
the Petroleum Industry Act 2021, is the sole regulator in dealing with such matters in the Nigerian upstream sector.
Valuechain reports that as it were, the issue at stake is purely a regulatory matter and the Commission had earlier claimed communicating the decline of Ministerial assent to ExxonMobil in this regard. “As such the Commission further affirms that the status quo remains. The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector,” Komolafe said in a statement signed by him yesterday.