By John Ikani
Exxon Mobil, Shell, and other oil giants seeking to exit Nigeria’s onshore fields can secure swifter approval if they accept responsibility for oil spills, according to the regulator.
The companies, including TotalEnergies and Eni, have been aiming to shift focus to deepwater drilling due to security concerns like theft and sabotage in the Niger Delta, the nation’s oil hub.
However, regulatory hurdles have stalled their departures.
At a meeting in Abuja, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) chief, Gbenga Komolafe, presented a faster exit option with quicker approval.
This option hinges on the companies committing to clean up spills and compensating impacted communities.
“We have a potential solution here,” Komolafe said. “While the standard approval is set for June, it could be significantly expedited.”
“By choosing this option, the companies acknowledge the obligations they’ll be undertaking,” he clarified.
A second, longer-term option involves waiting for NUPRC to determine and assign liabilities, potentially delaying final approval until August.
The regulator seeks a balance between faster exits for oil majors, environmental protection, safeguarding local communities, and ensuring the long-term viability of the assets.
The companies are currently evaluating the options and will provide a response soon. Analysts warn that the accelerated route could cost oil majors millions for cleanups and reparations.
“The first option carries the risk of the transferring company remaining responsible for the asset until the process concludes,” explained Ayodele Oni, an energy lawyer at Lagos-based Bloomfield Law Firm. “Option two, on the other hand, puts them at the regulator’s mercy since they waive their right to automatic approval.”
The departure of these major players opens up a total of 26 onshore oil blocks, holding an estimated reserve of 13.76 billion barrels of oil, 2.70 billion barrels of condensate, and a staggering 90,717 billion cubic feet of gas, according to NUPRC.
“Our goal is to ensure the incoming companies possess the necessary financial resources and technical expertise to manage these blocks responsibly throughout their lifecycle, adhering to best practices in asset stewardship,” said Komolafe.
To facilitate this transition, NUPRC has engaged two global oil and gas decommissioning consultants, S&P Global Commodity Insights and Boston Consulting Group, to perform due diligence on the assets slated for divestiture.
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