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No cause for alarm over divestments by oil majors — NNPC boss

Nigerian National Petroleum Corporation, NNPC, yesterday, dismissed insinuations that the recent spate of divestments by some international oil companies, IOCs, from some onshore oil blocks may lead to crisis in the nation’s oil and gas industry.

The Group Managing Director, NNPC, Mr. Andrew Yakubu, told newsmen on the sidelines of the ongoing World Energy Congress in Daegu, South Korea, that the divestments are not only healthy for Nigeria’s petroleum industry, but would also go a long way in promoting effective indigenous participation in core upstream activities.

The new Group General manager NNPC, Mr. Andrew Yakubu talking to journalists after a Presidential Briefing on the new Petroleum Industry Bill at the Presidential Villa, Abuja. Photo by Abayomi Adeshida
The new Group General manager NNPC, Mr. Andrew Yakubu talking to journalists after a Presidential Briefing on the new Petroleum Industry Bill at the Presidential Villa, Abuja. Photo by Abayomi Adeshida

He said: “These are not withdrawals in the real sense of it. The fact is that a number of these IOCs are moving into more challenging frontiers in the deep offshore and are leaving the onshore blocks which they consider less challenging.”

The NNPC boss noted that the major players that are divesting have actually been sitting on those acreages for years, and have allowed them to go fallow without significant development.

“So it is only fair for them to release these blocks so that others, especially the indigenous operators can have the blocks and grow in the upstream business. This, indeed, is a good development and I think we are moving in the right direction,” he said.

He also hinted that the divestment offers immense opportunities for the nation’s  indigenous flagship upstream operator, the Nigerian Petroleum Development Company, NPDC, to grow its capacity and capability, especially as it strives to meet the aggressive target of daily crude production of 250, 000 barrels by 2020.

Yakubu, who is leading a team of Nigeria’s oil and gas experts to the global energy meet, also maintained that the advent of the shale gas and oil revolution in America, would not immediately have serious negative impact on the Nigeria’s crude oil fortunes as earlier projected by some petroleum analysts.

He said: “No doubt the shale gas phenomenon poses a pushback on our oil and gas. But the good news is that as we speak, the impact is going to come a very long time from now because a close examination of the various discoveries of shale gas shows a huge misalignment between what was projected and the actualisation of most of the gas projects that would bring shale gas into full maturity.”

He explained that though the shale gas revolution is real, its availability in the global energy market is being hampered by high cost and other infrastructure challenges thus making conventional crude oil a cheaper energy source.

He, however, stated that while the NNPC takes comfort in this development, the Corporation is moving to initiate measures to ensure that the country is not caught napping if and when shale gas achieves the projected global penetration.

Yakubu said: “Once again, the good news in this regard is that Mr. President, through the Minister of Petroleum Resources, Mrs. Diezani-Alison-Madueke, has made it clear that the maximization of our various energy resources is central to the reforms in the oil and gas industry. And back home, we have since channeled our energy to the development of petrochemicals, fertilizers and other gas-based industries that would maximise the utilisation of our gas resources. So far, our interactions and engagements with various global energy leaders in this Congress have reassured us that we are moving in the right direction.”

The 22nd World Energy Congress which endedn today (Thursday), had in attendance over 6,000 delegates from prominent energy jurisdictions across the world.

The Congress, which has the central theme: “Securing Tomorrow’s Energy Today,” was focused on the challenges posed by the globalisation of energy demand, how energy supplies can be protected against disruptions and how efforts to mitigate climate change affect access to future energy resources. These were summed up in the concept of the “energy trilemma” by the World Energy Council, organisers of the Congress.


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