There are indications that seven factors - many years of environmental pollution, conflicts with host communities, petitions against divestment, several judgment debts, decommissioning liabilities, lack of financial capacity and lack of adequate technical competence - might stop some companies from selling and buying oil assets, under the current divestment programme.
This is even as the government has insisted that due process be followed as contained in the Divestment Framework, consisting of seven cardinal pillars in line with the Petroleum Industry Act, PIA and the national interest of Nigeria.
The pillars encompass technical capacity, financial viability, legal compliance, decommissioning obligations, host community engagement, labor relations, and data repatriation.
Checks by Energy Vanguard indicated that some companies involved in the various divestment have made submissions to demonstrate their commitments toward protecting the environment, resolving communal issues, decommissioning as well as financial and technical competence while others have not sufficiently done so.
Also, while the government has cleared Eni's to sell Nigerian Agip Oil Company Ltd (NAOC) assets to Oando Plc, others to be concluded included the ExxonMobil/Seplat deal, involving the divestment of the entire interest in Mobil Producing Nigeria Unlimited to Seplat Energy and the sale of Shell Petroleum Development Company of Nigeria Limited (SPDC) onshore assets to Renaissance Group.
The group is made up of five Nigerian exploration and production companies (ND Western Limited, Aradel Holdings Plc, FIRST Exploration and Petroleum Development Company Limited, and The Waltersmith Group) plus an international energy group (Petrolin Limited).
It was further learnt that sellers' pre-deals financial obligations will be more than a billion US dollars, even as it remains unclear if they have the capacity to pay.
It was also gathered that the oil assets will add between 300,000 bpd and 350,000 bpd to the nation's output, amounting to $28 million at the current $80 per barrel price of oil in the global market.
FG to disclose status of outstanding divestment
The Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Gbenga Komolafe, could not be reached for comments over the weekend.
But a reliable source in the Commission, who pleaded anonymity, said: "Already, the Commission has concluded plans to provide updates on the status of the various divestment. We have been working to ensure the divestment are concluded in a very responsible and transparent manner.
"Some IoCs, still have unresolved environment and community issues in the Niger Delta. Some communities have gone as far as writing petitions against them, saying they would not want to be transferred to other parties without resolving them.
"There are also others with outstanding issues, due to several decades of oil and gas exploration, production and pollution, including communal conflicts. In some cases, debts or claims have not been paid after years of court judgments.
"The government would like to get satisfactory answers or concrete plans toward addressing these and other matters, including technical and financial capacities. So, it would be difficult for companies with such issues to scale through. If they do, I will be surprised because there is zero tolerance against these issues as the Commission would not want to be blamed now and in the future for any consequences."
We regulate to protect national interest -- NUPRC
The source also said: "As a regulator, our work is guided by the comprehensive Divestment Framework consisting of seven cardinal pillars. Each aspect is meticulously assessed to safeguard national interests and ensure a seamless transition. The framework was established for the first time in the 68-year history of Nigeria's exploration and production, in line with the PIA and the national interest of Nigeria. The regulator has defined clear seven regulatory pillars and gazetted assignment regulation in line with the law to transparently guide divestment and assignment of interests in the upstream. Should the law be fulfilled and upheld in our national interest against the wishes of a few cabal? I think so."
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Oil theft, sabotage major causes of spill -- Shell
Further checks by Energy Vanguard indicated that many IoCs and other stakeholders do not make their daily environment-related information public as a matter of policy.
However, in its latest briefing notes obtained by Vanguard, Shell noted that only few spills occur as a result operational issues, adding: "Most oil spills in the Niger Delta region continue to be caused by crude oil theft, the sabotage of oil and gas production facilities, and illegal oil refining, including the distribution of illegally refined products.
"In 2023, about 94% of the oil spills of more than 100 kilograms from SPDC-operated facilities were caused by illegal activities of third parties - 139 incidents with a total volume of 1.4 thousand tonnes, compared to 75 incidents in 2022 with a total volume of 0.6 thousand tonnes."
