The Nigerian National Petroleum Corporation (NNPC) says 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 on Monday at the 2021 Society of Petroleum Engineers (SPE) Nigeria Annual International Conference and Exhibition (NAICE).
The News Agency of Nigeria (NAN) reports that the conference has as its 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.
“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.
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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 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.
