FG Completes $1.5bn Oil Sector Divestment Deals
The Federal Government has completed the divestment deals between Nigeria Agip Oil Company and Oando Plc, as well as that of Equinor and Project Odinmim, which jointly worth about $1.5bn.
It made this announcement on Wednesday, adding that, as at June 2024, the country’s functional oil rigs increased to 34, adding that a total of 31 oil blocks were currently on offer for bidding in the 2024 Licensing Round through the Nigerian Upstream Petroleum Regulatory Commission, an agency of the Federal Government.
The Chief Executive, NUPRC, Gbenga Komolafe, who disclosed this while speaking at the Nigeria Oil and Gas conference in Abuja, also gave updates on the $2.4bn Shell Petroleum Development Company and Renaissance divestment deal, as well as the $1.2bn ExxonMobil and Seplat deal.
Commenting on the four major divestments by International Oil Companies in Nigeria, Komolafe said, “For some of you who were at the panel session on Tuesday, the Chairman of IPPG (Independent Petroleum Producers Group) raised issues about the need for us to give update on the divestment programmes that are ongoing.
“Now, I am here to give you real-time updates on the four major divestments in Nigeria. The NAOC-Oando divestment has been concluded. The signing ceremony is to be conducted in the coming days.
“The Equinor-Project Odinmim divestment had also been completed. Also, the signing ceremony is to be conducted in the coming days. For the SPDC–Renaissance deal, documents have been submitted by SPDC. The documents are undergoing due diligence as we speak.”
The NUPRC boss further told delegates at the conference that the ExxonMobil– Seplat deal, the concerned parties have “expressed commitment to proceed to apply for ministerial consent to NUPRC,” adding that “we are yet to receive any as we speak.”
In September 2023, Energy company, Oando Plc, had reached an agreement with Italian firm, Eni, for the acquisition of 100 per cent of the shares of its oil and gas unit, Nigerian Agip Oil Company Limited.
Although neither buyer nor seller divulged the transaction value, analysts suggested that it was worth more than $500m
The Company Secretary, Oando Plc, Ayotola Jagun, had stated in a statement at the time that the completion of the transaction was subject to ministerial consent and other required regulatory approvals.
With this transaction Oando increases its current participating interests in OMLs 60, 61, 62, and 63 from 20 per cent to 40 per cent.
Also in November 2023, it was reported that Norwegian energy firm, Equinor, had hired Standard Chartered to assist in the sale of its major stake in an offshore oilfield in Nigeria.
The potential sale of Equinor’s 20 per cent stake in the Agbami field offshore Nigeria could fetch up to $1bn, according to Reuters’ sources at the time.
Equinor and Chappal Energies had entered into an agreement for the sale of Equinor Nigeria Energy Company, which holds a 53.85 per cent ownership in oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Equinor has been present in Nigeria since 1992 and has played a significant role in developing Nigeria’s largest deep-water field, Agbami. Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for the partners and the Nigerian society.
Rigs hit 34
Meanwhile, Komolafe further told delegates at the conference that Nigeria’s oil rigs increased to 34 in June 2024.
“Our rig count has increased progressively and it is something for us to celebrate. If you compare from 2019 up till 2022, at a point the rig count decreased to about 10 rigs, but today the situation has improved tremendously.
“Compared to what we had in 2022 when we recorded a drop in rig count to about 10, I want to announce that as at June 2024, we had about 34 rigs in the industry, and that is a significant jump.
“And for us as a regulator we intend to continue through our regulatory processes to sustain this pace so that we can ramp up our oil production,” Komolafe stated.
On the number of oil blocks that on offer to investors in the 2024 licensing round, he said, “The NUPRC has currently put on offer a total of 31 blocks as I speak, and that exercise commenced on April 29, 2024, and for our information, the registration exercise will close in about 48 hours from now, which is precisely by midnight of Friday, July 5, 2024.
“So if there are still potential investors that want to participate in this exercise as we have canvassed during the various road shows we conducted, we enjoin you as prospective and wise investors to take advantage of the next remaining 48 hours to participate.”
