With growing demand from Western environmental campaigns to curb petroleum production as part of a journey to net-zero carbon emissions, the pressure is on international oil companies to cease exploration and production activities in Africa. One could assume that if these majors do stop all their E&P on the continent, independent indigenous producers and national oil companies will pick up where they left off.
The 113 OMLs are split almost in half with 57 located onshore and 56 located offshore. 47 per cent of those are operated by IOCs while DOCs operate 45%. That ratio is about to be skewed more in favour of the DOCs with SPDC set to sell off 19 more assets, which are expected to fetch the Anglo-Dutch giant an estimated $2.3bn, another significant windfall for a company that just pocketed $1.1bn from the TNOG deal.
The marginal field round superintended over by Funsho Kupolokun in his capacity as Special Assistant to Rilwan Lukman, who was Special Adviser to President Olusegun Obasanjo, did not just deepen indigenous participation, it also helped get ready some local players who would take advantage of asset divestments by the IOCs, 10 years in the future.
A potential sale of the onshore oil fields could be worth up to $3bn, according to agency reports, citing three sources involved in the process. The law gives Nigerians the opportunity to be considered in the awards of oil blocks, oil field licenses and oil lifting licenses under its emphasis on increased entrepreneurship and domestic assets. The law set a target to increase the use of indigenous labour, materials and resources to 70 per cent in all oil and gas projects in the country, as opposed to the previous 28 per cent.
Already, local content players like Century Group, whose work with SPDC and other key players has helped it build an advantageous operational framework and strong stakeholder management systems, hope to leverage its extensive local knowledge of the terrain and people, as well as challenges that erstwhile made producing most of these assets a challenge.
Although the industry has witnessed a surge in pipeline sabotage in recent times, especially around Aiteo’s assets, stakeholders are hopeful of indigenous firm’s ability to negotiate with local communities to provide right-of-way and access hitherto denied the IOCs.
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