FG Finally Responds to Report on International Oil Firms Leaving Nigeria
- The Minister of Petroleum Resources assured that no international oil company is exiting Nigeria amid rumours
- Heineken Lokpobiri said he had engaged with the various IOCs and none of them had indicated intention to leave the country
- He spoke against the backdrop of recent divestment programmes by some IOCs with most of them focusing on offshore operations
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
Heineken Lokpobiri, the Minister of Petroleum Resources (Oil), declared that no international oil companies (IOC) is leaving Nigeria.
Source: Getty Images
He made his remarks in light of previous IOC divestiture initiatives, the majority of which were centred on offshore operations.
According to Daily Trust, Shell finalised a deal in May 2024 to sell its 30% ownership in the Shell Petroleum Development Company of Nigeria (SPDC).
The divestment between ExxonMobil and Seplat, along with three other international oil corporations (IOCs), was also approved by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) last month.
The deal concerned Seplat Energy's purchase of ExxonMobil's onshore oil and gas properties in Nigeria. The acquisition is valued at $1.28 billion.
No IOC leaving Nigeria
Speaking in Cape Town, South Africa, on the fringes of African Energy Week, Lokpobiri said he had spoken with the different IOCs and none of them had expressed a desire to depart the nation.
“Let me say this. I interact with all the companies. IOCs, service providers, independent operators, marketers none of them are leaving Nigeria. I want to use this opportunity to assure the world that no company is leaving Nigeria.
“All those divesting are going deep offshore because they don’t want to contend with the local issues that they have been contending with for the past 70 years.
“The onshore and shallow water assets that they have been operating all these years, they want to leave them to the indigenous operators and go deep offshores. No company is leaving Nigeria because some people have the impression that companies are leaving. They are going deep offshore beyond the capacity of the local players,” Lokpobiri said.
He added that local energy firms that purchase IOCs' onshore assets are more than competent of running these businesses efficiently.
He emphasised how local companies like Seplat and Oando Plc have been working with IOCs in these areas for years, showcasing their ability and experience.
The minister also emphasised the ongoing economic benefits to Nigeria by promising that the country would not miss out on royalties, taxes, or capital inflows as a result of these divestitures.
“Let me start with the merger and acquisitions going on. I will use this opportunity to assure the rest of the world that Nigeria is just like any other country in the world. Some will bring their capital to invest and there will be some divesting. We are not against divestment. I always contend that we have enormous capacity in our indigenous company.
“Seplat is an indigenous company that bought ExxonMobil. Similarly, Oando is a very serious company. These companies have grown with enormous capacity.
“Even before the divestment, most of these companies had Nigerians as their field operators. The expatriates are only just in the office to oversee what’s going on. So, Nigeria will have nothing to lose in terms of royalties, taxes, and the way these things are professionally run. They have nothing absolutely to lose. It creates another opportunity for Nigerians to actually show themselves,” Lokpobiri said.
Analysts believe that the situation which has cause some companies to exit is a clear reflection of the challenges surrounding the ease of doing business in Africa.
Charles Abuede, a financial analyst said,
"It underscores the importance of addressing these issues to foster a more conducive and attractive environment for businesses in Africa"
Big oil company announces investment in Nigeria
Legit.ng reported that despite years of decline, Chevron Corp. has increased its exploration acreage in African oil producers, such as Nigeria and Angola, where it believes there is a chance for a production resurgence.
According to Liz Schwarze, vice president of global exploration, West Africa is a region rich in hydrocarbons and has received little attention in comparison to other regions.
Bloomberg reported that Chevron is adding several blocks while some of its counterparts are leaving.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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