Stakeholders in the country’s oil and gas industry at the weekend expressed growing apprehension over the delay of the Government in signing off on some International Oil Companies (IOCs) divestment deals which have been in the workings for some years.
The pending divestment deals which are capable of adding over 500,000 barrels per day of oil production include the Exxonmobil/Seplat and Shell/ND Western consortium deals.
Some of the industry observers who spoke anonymously expressed deep concerns over the continued delay which, they said, was robbing the country and the industry of billions of dollar.
President Bola Tinubu, had in his Independence Day address to Nigerians assured that the much awaited Exxonmobil/Seplat divestment deal will receive ministerial approval in a matter of days.
Nigeria is currently struggling with low oil production, a development that has greatly impacted oil revenue targets for the 2024 budget.
The President who also doubles as the Minister of Petroleum Resources disclosed this in his 2024 Independence Day speech.
The President said his administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes, saying this principle guides the divestment transactions in our upstream petroleum sector, where the nation is committed to changing the fortune positively.
‘‘As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.
The move will create vibrancy and increase oil and gas production, positively impacting our economy.”
But, two weeks after making the pronouncement and assuring stakeholders that the deal will sail through in a matter of days, the promise appears to have turned into one of the usual rhetoric.
One of the officials close to workings of the deal told Daily Sun that her had to suspend an official trip to South Africa, hoping that, latest the President would have signed-off on the Deal by October 3.
“But there we are today, nothing seems to have happened. The President has left for London and from there to France without any hope in sight as what he went for and when he will arrive. In other climes, The President’s words are sacrosanct. With these, how do you expect the international business community to take us seriously when Government makes pronouncements?
A worried Chairman of the Independent Petroleum Producers Group (IPPG), Mr. Abdulrazaq Isa, at the Crude Oil Refinery Owners Association of Nigeria (CORAN) Summit in Lagos, expressed concerns over the delay in some IOCs divestment.
He pointed out that, concluding all pending IOCs divestment transactions, diligently and swiftly, will help the country derive optimum value from these transactions for the sake of national interest.
Isa who is also the Chairman of Waltersmith Refinery, lamented that, despite our world class and vast hydrocarbon resource base, our position is that of a net importer of crude oil as feedstock for existing domestic refining capacity.
He disclosed that, the current crude production of 1.35 million barrels per day continues to pose an existential threat to Nigeria’s socio-economic wellbeing and our ability to provide feedstock for our domestic refineries if the divestment deals are quickly concluded.
According to him, holistically addressing the above may unlock incremental production of 500,000 barrels of oil per day and 1.5 MMscf of gas per day in the short to medium term.
“Nigeria should have no business importing crude oil to meet domestic refinery feedstock given the hydrocarbon resources at our disposal. It is for this reason IPPG has and will continue to clamour for steps aimed at addressing under-investment and unlocking the much-needed incremental crude oil and gas production,”.
He disclosed that the long-term aspiration of making Nigeria a net exporter of refined petroleum products is reality whose time has come with the private sector now fully leading the charge in the refining sector.
However, he said, for the current achievements recorded in the sector to endure, government policies across the implementation of the Domestic Crude Oil Supply Obligation (DCSO) and a Willing-Seller Willing-Buyer regime must be strengthened
Isa maintained that the (DCSO) will serve as an avenue to guarantee availability and reliability of feedstock for all domestic refineries from the upstream sector on a Willing Seller Willing- Buyer basis in compliance with the Petroleum Industry Act (PIA).
SOURCE: The Sun News
