From Shell to Renaissance
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has denied a BusinessDay report saying the commission approved Shell’s $1.3…
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has denied a BusinessDay report saying the commission approved Shell’s $1.3 billion sale of its onshore assets to Renaissance — a consortium of four Nigerian oil companies, and Petrolin — a Swiss firm, pending President Bola Tinubu’s approval. The consortium includes ND Western, Aradel Energy, First E&P, and Waltersmith. Separately, NNPC and Chevron completed the conversion of five joint venture assets, targeting 165,000 barrels per day by late 2024. The conversion aligns with the Petroleum Industry Act (PIA) 2021, transitioning existing Oil Prospecting Licenses and OMLs will automatically transition into PPLs and PMLs upon expiration, with the option for voluntary conversion.
A few weeks ago, the NUPRC announced that it had approved Eni Nigeria’s bid to sell its wholly-owned subsidiary, Nigerian Agip Oil Company, to local firm Oando. There was a public uproar, with claims that the deal was fast-tracked due to President Tinubu’s connection with Oando, while similar transactions had been delayed. For example, ExxonMobil faced delays after agreeing to sell its equity interest in its Mobil Producing Nigeria shallow-water affiliate to another local firm, Seplat Energy. Over the past few decades, investments in Nigeria’s petroleum industry have declined due to significant challenges faced by International Oil Companies (IOCs), including insecurity, damage to infrastructure, oil theft and widespread corruption. As a result, IOCs have resorted to selling onshore assets to focus on deep-water fields where some of the external risks are minimised despite the higher cost of production. Since this has become the norm, the federal government should embrace it and devise new strategies to support local firms in attracting investments for onshore asset development while encouraging IOCs in their offshore ventures.