Lokpobiri Reacts To Shell Exit, Says FG Not Averse To Asset Sales

Minister of State for Petroleum Resources, Senator Heineken Lokpobiri has disclosed that the Federal Government would not oppose any legitimate business transactions in the oil and gas sector.

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He however, affirmed the Nigerian government’s commitment to fostering a business-friendly environment in the sector.

The Special Adviser on Media and Communication to the Minister, Nneamaka Okafor said, the minister addressed the Shell’s decision to sell its onshore assets to a consortium of five Nigerian companies on the sidelines of the World Economic Forum in Davos, Switzerland.

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Recall that the British Energy Giant, recently signed an agreement to sell its Nigerian onshore oil assets to five local companies for $2.4 billion, pointing to the challenging operating environment in the Niger Delta region over the years as the main reason.

The company said, it will sell the Shell Petroleum Development Company of Nigeria Limited (SPDC) for $1.3 billion, while the buyers will make an additional payment of up to $1.1 billion later.

However, Sen. Lokpobiri emphasised that the Nigerian government would not impede legitimate business transactions in the oil and gas sector.

He stated, “On the part of the government, once we get the necessary documents, we will not waste time to give the necessary considerations and consent.”

Responding to concerns about international oil companies (IOCs) diversifying their onshore assets, the minister highlighted the positive aspects of the diversification.

He noted that it creates opportunities for indigenous companies with the capacity to acquire and professionally manage these assets, leading to increased profitability and the maximization of their potential.

Addressing potential negative impacts on the country, Minister Lokpobiri reassured that the diversification would not adversely affect Nigeria.

He emphasized the government’s engagement with IOCs regarding the decommissioning of non-productive assets and abandonment issues.

The minister stated that concerns raised by IOCs, particularly with Nigerian banks, have been addressed, assuring a safe environment for the handling of funds related to decommissioning and abandonment.

“As a government, we will adhere to the law without jeopardizing legitimate businesses,” he added.

Responding to questions on preventing IOCs from diversifying their upstream operations, the Minister clarified that companies have not left their upstream deep water assets. Instead, they are diversifying their onshore assets, creating opportunities for local companies with developed capacity and financing to acquire and profitably manage these assets.

The minister reiterated the government’s commitment to addressing sector concerns, including insecurity and aging infrastructure, such as pipelines. He highlighted ongoing engagements with companies to invest in pipeline technology and other critical infrastructures within the oil and gas value chain.

Sen. Lokpobiri concluded by announcing that the President has given approval for a licensing bid round, demonstrating the government’s dedication to initiating the process promptly.

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