OGRepublic August Edition

NIGERIA OIL AND GAS
NNPC to Develop Comprehensive Divestment Policy
for IOCs Operating in Nigeria
IOCs diversify their portfolios to low-carbon
investments.
Kyari however, said that energy consumption
would increase beyond what renewable energy
sources can meet by 2050 especially with the
anticipated economic growth and rising
population of Asia and Africa.
“Building on this convergence, Nigeria as a key
player in global energy security is addressing its
challenges mainly, Fiscal, Security and Cost
Competitiveness to stimulate investments in
the oil and gas industry.
The Nigerian National Petroleum
Corporation (NNPC) has said that it
will soon develop a Comprehensive
Divestment Policy for International Oil
Companies ( IOCs) operating in the country
to protect strategic national interest.
Mr Mele Kyari, the Group Managing
Director, NNPC disclosed this in Lagos
recently at the 2021 Society of Petroleum
E n g i n e e rs ( S P E ) N i g e r i a A n n u a l
International Conference and Exhibition
(NAICE).
The conference, with the theme: “The
Future of Energy – A Trilogy of
Determinants: Climate Change, Public
Health, and the Global Oil Market.”
Kyari said the divestment policy would
ensure that only investors with technical,
financial and operational capabilities take
position of the IOCs assets thereby adding
value to the industry.
“We have seen a whole wave of
divestments by major IOCs operating in
our country.
“NNPC as their major partner cannot stop
partners from divesting their interests. We
can’t do this because we all have the right
to migrate our portfolios depending on the
circumstances.
Omar Farouk
Mele Kyari, Group Managing Director (GMD) Nigerian National Petroleum Corporation (NNPC)
“The divestments create challenges for us in
ensuring that we get right and competent
investors to take position and add value to the
industry.
“We have engaged all our partners to ensure
that while they have the right of divestments,
that there should be no situation where this will
become a waterloo of our industry.
“Therefore, NNPC will ensure Nigeria’s strategic
national interest is safeguarded by developing a
comprehensive Divestment Policy that will
provide clear guidelines and criteria for
divestment of partner’s interest.”
Kyari said going forward, that the NNPC would
make clear distinctions between Divestment of
Shares and Operatorship Agreements under
various Joint Operating Agreements.
According to Kyari, it will also leverage its rights
of pre-emption as well as evaluating the
operational competency and track records of
new partners.
He said attention would be paid to
abandonment and relinquishment costs,
severance of operator staff as well as third party
contract liabilities.
He said that the divestment was being driven by
global energy transition which was making the
“This include the recent passage of the
Petroleum Industry Bill, the National Gas
Expansion Programme and development of gas
infrastructure such as the Ajaokuta- Kaduna-
Kano (AKK) and the Obiafu-Obrikon-Oben (OB3)
pipelines.’’
Kyari reiterated Nigeria’s commitment to
energy transition in the near future, adding that
its huge gas resources would serve as a vehicle
for the country’s transition to cleaner sources of
energy.
Earlier, Mr Olatunji Akinwunmi, the Chairman,
SPE, Nigeria Council, said it was in the interest of
the country’s oil and gas industry to be in phase
with the rest of the world regarding energy
transition.
“Reduction of carbon emissions could be
achieved by more efficient operations, focusing
on transition to gas exploration and
development to replace coal in electricity
generation.
“In addition, novel technologies as well as
digital transformation initiatives should help in
the direction of reducing both emissions and
cost, which would render our products more
accessible, more competitive, and more
acceptable.’’
NNPC is leveraging technology to achieve better
systems and processes optimization to support
performance, accountability and value creation
that exceeds the simple fulfilment of our
business mandates.
NNPC remain committed to working with
stakeholders to maintain firm position in
today’s and future energy industry.
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