Engr. Simbi Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board, shared that Nigerian oil companies have successfully acquired approximately 26 oil mining licenses in the Niger Delta region during the past ten years. This information was disclosed during the 2023 Petroleum and Natural Gas Senior Staff Association Energy and Labour Summit held in Abuja on Wednesday.
Wabote also highlighted ongoing divestments, which include plans by Shell and ExxonMobil to divest oil and gas assets of substantial value, as well as Eni’s announcement in September regarding an agreement with Oando Plc for the sale of NAOC interests in six onshore blocks and the Okpai gas power plant located in Delta State.
Wabote underscored that divestments of oil assets do not inherently have a negative impact. Instead, they provide an opportunity for the utilization of locally developed capacities and capabilities, which have matured through the implementation of local content, in the upstream sector.
Wabote outlined several opportunities that would accrue from divestments, such as the injection of new capital, the rejuvenation of divested assets, and an increase in crude oil production through the investment in technologies by the acquiring firms.
Other direct benefits are the creation of direct and indirect employment opportunities by the indigenous companies and their service providers.
He reiterated that the divestments confirm that Nigerians and indigenous companies have come of age and have acquired the technical, managerial, and financial capabilities to play in the “big league”.
He added that “the involvement of our financial institutions on the transactions represents means of efficient capital deployment and capacity building on loans syndication on an international scale. This is also applicable to legal services, insurance, government relations, employee relations, community liaison, and others.”
Aside from the opportunities, the NCDMB boss equally highlighted challenges encountered in the divestment exercises.
According to him, the challenges revolved around the time required to get necessary regulatory approvals as well as the substantial interests from various groups covering political, legal, communal, and labor.
Among other challenges are the potential for the disruption of oil and gas production, job losses, as well as access to the latest technology especially if the new investors lack the technical expertise or have no support from original equipment manufacturers.
He also highlighted issues around how to manage legacy issues or liabilities related to the environment, communities, and other social commitments and pressure on new investors to recoup investments on time to offset loans and address other financial requirements.
The NCDMB boss assured that the Board would continue to partner with industry stakeholders to institute regulations that would ensure that the increasing footprints and stakes of indigenous oil and gas production companies would not lead to a reduction in Nigerian content compliance.