AMID worries over the exit of some international oil companies (IOCs), the Nigerian government has approved the $ 2.4 billion onshore assets sale of British energy giant, Shell Petroleum Development Company Nigeria Limited.
Shell had on Tuesday, January 16, announced official plans to sell its Nigerian onshore oil and gas subsidiary to a consortium of five companies known as Renaissance for $ 2.4 billion.
Also, Seplat Energy has been waiting for regulatory approval for its purchase of Exxon Mobil’s onshore assets for $ 1.3 billion since February 2022.
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Oando recently secured a $800 million loan for the purchase of 100 per cent shares of Nigerian Agip Oil Company Limited.
Minister of State for Petroleum Resources, Heineken Lokpobiri, who confirmed the approval for the sale of Shell assets said the Federal Government would not oppose any legitimate business transactions in the oil and gas sector.
“On the part of the government, once we get the necessary documents, we will not waste time to give the necessary considerations and consent,” he stated.
He, however, affirmed the Nigerian government’s commitment to fostering a business-friendly environment in the sector.
The Special Adviser on Media and Communication to the Minister, Nneamaka Okafor, who disclosed the minister’s position in a statement said, the minister addressed Shell’s decision to sell its onshore assets to a consortium of five Nigerian companies on the sidelines of the World Economic Forum in Davos, Switzerland.
The company explained it would sell the Shell Petroleum Development Company of Nigeria Limited (SPDC) for $1.3 billion, while the buyers would make an additional payment of up to $1.1 billion later.
Responding to concerns about international oil companies (IOCs) diversifying their onshore assets, Lokpobiri highlighted the positive aspects of the diversification.
He explained that it would create opportunities for indigenous companies with the capacity to acquire and professionally manage the assets, leading to increased profitability and the maximization of their potential.
Addressing potential negative impacts on the country, the minister reassured that the diversification would not adversely affect Nigeria.
He emphasised the government’s engagement with IOCs regarding the decommissioning of non-productive assets and abandonment issues.
The minister stated that concerns raised by IOCs, particularly with Nigerian banks, had been addressed, assuring a safe environment for the handling of funds related to decommissioning and abandonment.
As a government, we will adhere to the law without jeopardizing legitimate businesses,” he added.
Responding to questions on preventing IOCs from diversifying their upstream operations, the minister clarified that companies had not left their upstream deepwater assets. Instead, they were diversifying their onshore assets, creating opportunities for local companies with developed capacity and financing to acquire and profitably manage these assets.
The minister reiterated the government’s commitment to addressing the sector concerns, including insecurity and aging infrastructure, such as pipelines.
He highlighted ongoing engagements with companies to invest in pipeline technology and other critical infrastructures within the oil and gas value chain.
Lokpobiri further disclosed that President Bola Tinubu had approved a licensing bid round to ensure transparency in oil sector business.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.