March 17, 2022

PENGASSAN expresses fears over IOCs’ divestment

PENGASSAN expresses fears over IOCs’ divestment

•Urges FG to provide more incentives for them to remain

By Victor Ahiuma-Young

The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, yesterday expressed fears over the increasing divestments by the International Oil Companies, IOCs, from Nigeria, begging the Federal Government to provide more incentives to the IOCs to remain in Nigeria. 

In a statement by its President and General Secretary,    Festus Osifo and Lumumba Okugbawa, respectively, PENGASSAN noted that the trend which started in 2012, spread quickly in the industry and had reduced the fortunes of developments in the Oil and Gas fields.     


According to the statement, “While we are not averse to indigenous participation in the Nigerian Oil and Gas industry, we will not fold our arms and allow mediocre to take hold of our national assets and ruin the fortunes of future generations for immediate gains. It is on record that since IOCs started divestment in 2012; most of the companies that purchased such assets do not have and cannot attract the requisite finances for capital expenditures in such fields or have made reasonable efforts to provide the required human and technical developments of Nigerians within their establishment.

“Most of these companies practically draw from the existing wells until it dries up. They do not substantially if at all invest in work over operations or drilling of new wells. A country whose major source of foreign exchange earnings is Oil and Gas cannot afford to allow this depletion to continue and this charge PENGASSAN has decided to lead.

“More so, most of these companies do not only refuse the unionization of workers, but also subject their employees to sub-optimal conditions. This is reprehensible and against all known laws and conventions. 

“As an Association, we will henceforth not cooperate with any company whether indigenous or foreign that does not have the capacity to develop the Oil and Gas fields or have a track record of subjecting employees to modern-day slavery.

“The Minister of Petroleum must be worried of portfolio and briefcase investors in the Oil and Gas sector whose sole aim is to milk the field dry, as this will prevent a similar fate that befell the power sector. NNPC limited must be strengthened to become a major player in the upstream environment to spur and attract investment to Nigeria. Concerted efforts should be made to persuade and provide more incentives the IOCs to remain in the country in order to benefit from the newly passed Petroleum Industry Act,PIA. However, should they decide to exit after all efforts fail, a good investor that has relevant technical experience, good financial standing, and reputation for managing employees must be sort after. 

“In such divestments, the jobs of Nigerians working in such locations, their exit/welfare package, and the ability of the investors to continuously develop such field which will, in turn, provide jobs for Nigerians working in the Oil and Gas service sector will be of utmost priority. 

“Even in the wake of the energy transition, the Oil and Gas industry will still be relevant for a long time to come, and such, the Nation must reap its full benefit. PENGASSAN will continue to act as a watchdog and question any shady divestment with every tool at its disposal to protect our country, Nigeria, and the jobs of all Nigerians.”