The federal government through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has proposed to expedite the exit of major oil companies like Shell and Exxon Mobil from the Niger Delta region, on the condition that they accept responsibility for oil spills and finance the cleanup efforts.
During a meeting in Abuja, Gbenga Komolafe, the head of NUPRC presented a quicker approval process as a short-term option for the companies if they agree to address oil spills by cleaning up and providing compensation to affected communities.
Alternatively, the second long-term option would require the companies to wait until the NUPRC identifies and assigns all liabilities, potentially postponing final approval until August.
The NUPRC aims to strike a balance between enabling a swift exit for major oil companies and safeguarding the environment, local communities, and the long-term sustainability of the assets.
- “We have the undertaking here. The consent here though fixed for June, could be much shorter.
- “If you agree to take that option, you sign the undertaking knowing that there are obligations to be fulfilled,” Komolafe said.
According to the NUPRC, the exit of major oil companies will result in 26 onshore blocks being available, which contain an estimated 13.76 billion barrels of oil, 2.70 billion barrels of condensate, and approximately 90,717 billion cubic feet of gas.
- “We aim to ensure that the companies that take over these blocks have the necessary financial resources and possess the technical expertise required to responsibly manage the blocks throughout their lifecycle in accordance with good asset stewardship practices,” Komolafe added.
On their part, the companies said they are reviewing the options and will respond soon.
Backstory
In January, TotalEnergies announced plans to offload its minority stake in a significant Nigerian onshore oil joint venture, a move following Shell’s recent divestment.
The CEO Patrick Pouyanne stated this during a presentation of the company’s financial results.
According to the CEO, the company is looking to restructure its portfolio since producing oil in the Niger Delta has become difficult.
Also. Shell disclosed its agreement to sell its 30% stake in SPDC to a consortium composed mostly of local companies for a sum of up to $2.4 billion.
In addition, other international oil companies like ExxonMobil and Norway’s Equino have all sold assets in Nigeria in recent years to focus on newer, more profitable operations elsewhere.