Approve divestment deals and leave production recovery to us __Roger Brown
Sopuruchi Onwuka
Independent petroleum companies in the country seeking to replace international oil companies onshore Niger Delta have the capacity to drive the country’s rapid production recovery if pending divestment deals are approved by government.
Seplat Energy PLC declared at the 2024 NOG Energy Week Conference & Exhibition in Abuja that the country’s oil and gas production levels would increase significantly when divestment deals between international oil companies and independent petroleum companies get government’s approval.
The Oracle Today reports that divestment deals between Shell and Renaissance Consortium, Mobil Producing Nigeria (MPN) Unlimited and Seplat Energy, as well as Nigeria Agip Oil Company (NAOC) and Oando Energy Resources (OER) are all sitting endlessly at the table of the Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The CCE, Mr Gbenga Komolafe, is already accused by industry professionals of sitting on the divestment deals at the bidding of very powerful forces in the industry, even as the country’s production volumes and target revenues from the sector continuously fall to abysmal levels.
Industry analysts attribute the current low production numbers in the industry, the proportionate fall in accruing revenue, lull in oilfield activities and acute foreign exchange squeeze in the economy to the delays by the NUPRC in concluding the divestment deals.
They point at low investments and halt in work programmes in the assets under transaction as the reason for the acute fall in output as no one currently takes responsibility for new investments in the auctioned assets.
CEO Seplat Energy, Mr. Roger Brown, declared at the conference in Abuja that Nigeria’s sub-surface potentials could be largely optimized to increase oil and gas production levels increased if government would expedite closure of the divestment and other related deals.
Mr. Brown, who spoke during a panel session dubbed ‘Defining the Regulatory Frameworks Required to Support the Capabilities of Independents and Incentivize Growth’ said success of Nigerian Independent energy companies will benefit Nigeria through oil revenues and the development of a domestic gas-to-power industry, thus helping to fund expansion into renewable energy to help Nigeria increase energy access and unlock its entrepreneurial population by providing reliable and affordable energy in accordance with the UN Sustainable Development Goals.
The Seplat Energy CEO said: “International Oil Companies (IOCs) will look to divest to credible local players, those with high levels of governance and accountability in their ESG efforts. Indigenous players also need strong balance sheets and credibility in international financial markets, because the assets they’re acquiring will doubtless need future development.
“Also, indigenous companies must commit to working with communities to maintain or increase Nigerian content, as Seplat Energy has been doing for many years.”
Speaking to the country’s energy aspirations, he said the independents will play a key role in realizing the aspirations of the “Decade of Gas”, adding that strong governance framework is needed to support bankability of private sector direct participation/investment in this space.
Nigeria’s biggest decarbonization priority is to end small-scale generation and get households and businesses onto a reliable national grid that uses our gas resources, lowers the cost of electricity and allows renewable energy to be developed and connected into a nationwide grid.
Seplat Energy is committed to ending routine flaring by the middle of next year and we urge all other producers to make this a priority.
Seplat Energy’s new ANOH gas plant can supply enough gas to support more than 1GW electricity on the grid and this can displace hundreds of thousands of home generators; so, it will reduce the cost of electricity and hopefully get rid of these expensive and highly polluting generators, which are just a huge drag on Nigeria’s economy and which create massive problems with carbon emissions.
