The Nigerian National Petroleum Corporation, NNPC, says it will soon unveil a Comprehensive Divestment Policy that will guide the entire divestment process in the oil and gas sector.
The announcement by the Group Managing Director of the NNPC ,Mr Mele Kyari was made at the opening of the 2021 edition of the Nigerian annual international conference and exhibition organised by the Society of Petroleum Engineers with the theme: Future of Energy: A Trilogy of Climate Change, Public Health & Global Oil Market”.
The announcement comes amid news of divestment of investments by major oil players in the country in the quest for cleaner and environmental friendly energy.
Mr.Kyari said the NNPC partners reserve the right to divest their interests but the national oil company also has a duty to provide clear-cut guidelines and criteria for such divestment to guarantee a win-win situation for all parties.
“Going forward, NNPC will make clear distinctions between Divestment of shares and Operatorship Agreements under various Joint Operating Agreements, while leveraging its rights of pre-emption as well as evaluating the operational competency and track records of new partners”, he said.
The NNPC boss said several issues also needed to be addressed before the exit of the oil players to avoid damaging the economy.
Kyari said “special attention would be paid to abandonment and relinquishment costs; severance of operator staff; third party contract liabilities; competency of the buyer; post purchased technical, operational, and financial capabilities especially in the era of activist investor’s sentiments against funding of fossil fuel projects and alignment with Nigeria national strategic interest”.
He called on oil- dependent economies to get prepared for the future as the global transition to non-fossil sources of energy would mean declining revenue, foreign exchange and weaker funding of projects particularly in the context of green finance and activist investor’s action on the boards of major oil companies and global financial institutions.
Kyari however gave an assurance that that the NNPC would play a key role in the global transition to low-carbon energy in the near future by latching on Nigeria’s huge natural gas reserves; which has become the greatest enabler in making the switch over.
“We are deepening natural gas utilization under the National Gas Expansion Programme (NGEP) to earn more carbon credit and create a net zero carbon environment in line with our drive of becoming energy company of global excellence. Our goal is to take the right quantities of gas to every part of Nigeria at the right quality and the right price”.
The 3- day international conference is expected to chart a new focus for the oil and gas industry to retain its relevancy.
Hauwa Abu
