Unremitted Funds: NCDMB recovers $100m from oil companies

By Ediri Ejoh

THE Federal Government, yesterday, dropped hints of plans to introduce a comprehensive divestment policy to guide operations in the oil and gas industry.

The divestment policy would ensure that only investors with technical, financial and operational capabilities take the position of the IOCs assets, thereby adding value to the industry.

Speaking at the opening of the 2021 Society of Petroleum Engineers, SPE, International Conference and Exhibition, in Lagos, Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Mele Kyari, said it would no longer be business as usual for investors seeking to acquire the assets of International Oil Companies, IOCs, in the country.

He said: “We have seen a whole wave of divestments by major IOCs operating in our country. NNPC as their major partner cannot stop partners from divesting their interests. We can’t do this because we all have the right to migrate our portfolios depending on the circumstances.

“The divestments create challenges for us in ensuring that we get the right and competent investors to take the position and add value to the industry. We have engaged all our partners to ensure that while they have the right of divestments, that there should be no situation where this will become a waterloo of our industry.

“Therefore, NNPC will ensure Nigeria’s strategic national interest is safeguarded by developing a comprehensive divestment policy that will provide clear guidelines and criteria for divestment of partner’s interest.”

He explained that the NNPC would make clear distinctions between divestment of shares and operatorship agreements under various joint operating agreements.

According to Kyari, it will also leverage its rights of pre-emption as well as evaluate the operational competency and track records of new partners.

He added that attention would be paid to abandonment and relinquishment costs, severance of operator’s staff as well as third-party contract liabilities.

The NNPC boss noted that the divestment was being driven by the global energy transition which was making the IOCs diversify their portfolios to low-carbon investments.

Kyari said energy consumption would increase beyond what renewable energy sources could meet by 2050, especially with the anticipated economic growth and rising population of Asia and Africa.

He said: “Building on this convergence, Nigeria as a key player in global energy security is addressing its challenges mainly, fiscal, security and cost competitiveness to stimulate investments in the oil and gas industry”.

READ ALSO: Nigeria pledges to support Senegal grow its oil industry

“This includes the recent passage of the Petroleum Industry Bill, the National Gas Expansion Programme and development of gas infrastructures such as the Ajaokuta- Kaduna-Kano (AKK) and the Obiafu-Obrikon-Oben (OB3) pipelines.”

Also commenting on the theme of the event, “The Future of Energy, a Trilogy of Determinants: Climate Change, Public Health, and the Global Oil Market,” Managing Director, Total Exploration and Production Nigeria Ltd., Mr. Mike Sangster, who was represented by Mr. Victor Bandele, Deputy Managing Director, Deep Water, Total E&P Nigeria, said: “Therefore, meeting the climate challenge will mean embarking on energy transition, i.e. transforming the way we produce and use energy.

‘’The company said climate change was a reality and requires the collective mobilisation of society. The 2015 Paris Agreement generated a groundswell of awareness of the climate emergency.

“Five years later, the target recommended by the experts is a carbon-neutral society by 2050. This is a demanding goal that we must all, collectively, commit to.

This means that the future of energy is changing, and if we must remain relevant in the energy market of the future, then we must continue to adapt.

“Together with society, we are adapting to a world-class player in the energy transition with a target of net-zero carbon emissions by 2050.”

Sangster added that 2020-2030 would be a decade of change for TotalEnergies as it would become a broad energy company.

Vanguard News Nigeria

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.