The Nigerian National Petroleum Corporation (NNPC) has said it would outline policies to guide its joint venture partners (JVC) that wish to divest from joint ventures or the Nigerian oil and gas industry.
NNPC Group Managing Director, Mele Kyari on Monday said that Nigeria, as a key player in global energy security, was addressing its challenges, mainly fiscal, security and cost competitiveness, to stimulate investments in the oil and gas industry.
Kyari, who spoke in Lagos while delivering an address at the opening ceremony of the Nigeria Annual International Conference and Exhibition said, “NNPC, as a national oil company, is leading multiple initiatives to address this and other issues.
“As we celebrate the passage of the PIB, we have moved our focus to improve security architecture through collaboration with major stakeholders.”
According to him, the Nigerian Upstream Cost Optimisation Programme is working with operators and service contractors to challenge the cost of operations and increase profitability and growth in the industry.
“On the other hand, we are seeing a wave of divestment by oil majors operating in Nigeria. NNPC as a national oil company cannot stop partners from divesting their interest, even though it creates challenges for us in ensuring that we get the right and competent investors to take a position and add value to the assets.
“The NNPC will ensure that Nigeria’s national strategic interest is safeguarded by developing a comprehensive divestment policy that will provide clear guidelines and criteria for divestment of partners’ interest,” Kyari said.
He said the corporation would make clear distinctions between divestment of shares and operatorship agreements under various joint operating agreements while leveraging its rights of pre-emption and evaluating the operational competence and tract records of new partners.
Kyari said in order to sustain a prosperous business environment, particular attention would be paid to abandonment and relinquishment costs, severance of operator staff, third party contract liabilities, competency of the buyer, and post purchased technical, operational and financial capabilities.
He said the NNPC would declare its first dividend to Nigerians as it prepares to release its 2020 financial statements in the third quarter of this year.
The local unit of the Royal Dutch Shell had in May said that its onshore oil portfolio in Nigeria was ‘no longer compatible with its strategic ambitions.
“We have reduced the total number of licenses in onshore Nigeria by half. But unfortunately, our remaining onshore operations continue to be subject to sabotage and theft,” Chief Executive Officer, Ben van Beurden, told investors at the company’s AGM.
Early this year, Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited concluded the sale of their combined 45 percent interest in Oil Mining Lease 17 and related assets in the Eastern Niger Delta to TNOG Oil and Gas Limited.