By Sunday Etuka, Abuja
The Federal Government has engaged two leading global oil and gas decommissioning consultants to carry out due diligence on the proposed 26 oil blocks to be divested by the International Oil Companies (IOCs) to indigenous companies.
Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe disclosed this at the Industry Dialogue on Divestment in Abuja on Friday.
He gave their names as S&P Global Commodity Insights (SPGCI), and Boston Consulting Group (BCG).
Engr. Komolafe affirmed that “their role is to work with the Commission as independent consultants in defining all end-of-field life and abandonment legacy liabilities in compliance with divestment guidelines.
“They will also manage the operational risk across the entire asset portfolio, create a workflow for estimating total onshore decommissioning CAPEX liabilities, determine the host community’s obligations based on three per cent (3%) OPEX stipulated in the PIA, benchmark best practices on asset sales, and provide case study reports that draw lessons based on best practices”, he said.
According to him, “a total of 26 blocks are proposed to be divested. These blocks have an estimated total reserve of 8.211million barrels of oil, 2,699 million barrels of condensate, 44,110 billion cubic feet of associated gas and 46,604 billion cubic feet of non-associated gas. This is a significant contribution to the nation’s hydrocarbon resources.
“Additionally, these blocks contain P3 reserves estimated at 5,557 million barrels of oil, 1,221 million barrels of condensate, 14,296 billion cubic feet of associated gas and 13,518 billion cubic feet of Non-Associated Gas.
“It is worth noting that a substantial part of the P3 reserves is located in or near producing assets. This means that a competent successor could easily mature them to 2P reserves.
“Additionally, the current average production from these blocks is 346,290 barrels per day (bpod) (NAOC-28,018 bopd, MPNU-159,378 bopd, EQUINOR-36,155 bopd and SPDC-122,739 bopd), but the technical production potential is much higher – standing at 643,054 barrels (NAOC-147,481 bopd, MPNU-244,268 bopd, EQUINOR-39,203 and SPDC-212,102 bopd).
“These blocks have the potential to significantly boost our national production, which would benefit all stakeholders”, Engr. Komolafe noted.
He emphasized that the Commission’s regulatory goal was to ensure that parties in the divestment process conform to the approved divestment guidelines.
“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”, he stressed.
