Major oil companies such as Exxon Mobil and Shell that want to withdraw from Nigeria’s onshore oil sector can get approval faster if they take responsibility for spills instead of waiting for authorities to establish responsibilities, the minister said. regulatory authority Friday.
Exxon, Shell, TotalEnergies and Eni have all sought to leave the oil-rich Niger Delta in recent years, citing security concerns including theft and sabotage, to focus on deep-water drilling . However, their departure was delayed by regulatory hurdles.
At a meeting with companies in Abuja, the head of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, proposed a short-term option with faster approval if companies commit to cleaning up spills and to compensate communities.
“We have the commitment here. The consent, although set for June, could be much shorter,” he said.
“If you accept this option, you sign the commitment knowing that there are obligations to fulfill,” Mr Komolafe said.
The second long-term option is to wait for NURPC to identify and cede all responsibilities, which could delay final approval until August.
The NURPC seeks to strike a balance between a faster exit of oil majors and the protection of the environment, local communities and the long-term viability of assets.
The companies are reviewing options and will respond soon, they said.
Analysts estimate the fast-track option could cost oil majors millions of dollars in cleanup and repairs.
“The risk of option 1 is that the transferor continues to assume responsibility for the asset until the process is completed, while option 2 puts it at the mercy of the regulator since it has waived its right to presumptive approval,” said Ayodele Oni, an energy lawyer at Lagos-based law firm Bloomfield.
The departure of the majors means a total of 26 onshore blocks are on offer, containing an estimated reserve of 13.76 billion barrels of oil, 2.70 billion barrels of condensate and around 90,717 billion cubic feet of gas, according to the NUPRC.
“We want to ensure that companies taking over these blocks have the necessary financial resources and technical expertise required to manage the blocks responsibly throughout their lifecycle, in accordance with good asset management practices,” Mr Komolafe said. The NUPRC has engaged two global oil and gas decommissioning consultants, S&P Global Commodity Insights and Boston Consulting Group, to conduct due diligence on the assets to be divested. (Reporting by Camillus Eboh in Abuja and Isaac Anyaogu in Lagos; Editing by Elisha Bala-Gbogbo, Barbara Lewis and Emelia Sithole-Matarise)
