The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has moved to ensure that the proposed divestment of the oil and gas assets held by the Shell Petroleum Development Company of Nigerian Limited (SPDC) in the SPDC JV Assets, follows due process as entrenched in the Petroleum Industry Act (PIA) 2021,
The commission, on Monday, flagged off due diligence workshop to discuss and work together on the proposed divestment of the participating interests held by the SPDC in the SPDC JV Assets, through a sale by its shareholders of all the issued shares of SPDC to Renaissance Africa Energy Company Limited (Renaissance).
LEADERSHIP learnt that the assets being considered for divestment by SPDC have an estimated total reserve of 4.96 billion barrels of oil, 1.77 billion barrels of condensate, 28.16 trillion cubic feet of associated gas and 28.11 trillion cubic feet of non associated gas, when combined amount to 6.73 billion barrels of crude oil and condensate and 56.27 trillion cubic feet of gas.
The commission chief executive, Gbenga Komolafe, said the goal of the workshop is to identify a successor who not only possesses the requisite financial resources but also demonstrates the technical expertise to responsibly manage these assets throughout their lifecycle.
“This makes a significant contribution to the nation’s hydrocarbon resources. Additionally, these assets hold P3 reserves estimated at 2.85 billion barrels of oil, 850.85 million barrels of condensate, 11.3 trillion cubic feet of associated gas and 12.26 trillion cubic feet of Non-Associated Gas.
“Furthermore, we must ensure that the inherent environmental and end-of-life liabilities i.e. decommissioning liabilities, are accurately identified, and assigned to the party best equipped to bear the associated risks.
“This necessitates a comprehensive understanding of regulatory requirements, industry best practices, and the unique challenges inherent in oil and gas operations”.
Komolafe further explained that the SPDC JV assets are currently operated by the SPDC on behalf of its Joint Venture (JV) partners namely NNPCL Limited and Total Upstream Nigeria Limited, Nigeria Agip Oil Company and SPDC. The SPDC JV OMLs were originally awarded as Oil Exploration Licence -1(OEL-1) on 1 January 1949 covering the whole of southern Nigeria and Cameroon.
“Ultimately, the assets were converted to OMLs on 1 April 1962 and subsequently renewed in 2014 and 2018 for 20 years. To date, the assets have achieved a cumulative production of 5.35 billion barrels of crude oil, 165. 57 million barrels of condensate, 9.51 trillion cubic feet of Associated Gas and 3.75 trillion cubic feet of Non-Associated Gas, contributing immensely to the achievement of Nigeria’s crude and condensate output.
“Permit me to emphasise that the NUPRC is committed to free entry, free exit business principles aimed at encouraging investors in the sector. We understand the importance of providing a stable regulatory framework that instils confidence and encourages investment.
“To this end, we have implemented robust measures to streamline regulatory procedures and eliminate unnecessary barriers to investment.
“Accordingly, the Commission has developed a Divestment Framework consisting of seven cardinal pillars to guide the assessment of applications for Ministerial consent to the SPDC Divestment and other similar divestments”.
Also speaking, general manager SPDC Assets and deputy managing director, the Shell Petroleum Development Company of Nigeria Limited, Wessel de Haas, expressed hope that the workshop would provide necessary clarifications for the divestments.
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