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Nigerian oil sector to get more asset divestments – SPE

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As oil companies move to optimise their portfolios, the Nigerian oil and gas sector is likely to see more asset divestments, says the Society of Petroleum Engineers Nigeria Council.

Speaking at a press conference on Wednesday, the Chairman, SPE Nigeria Council, Mr Olatunji Akinwunmi, said discussions at the forum, slated for this month in Abuja, would be focused on the current realities in the industry, with the theme ‘Operational excellence and portfolio optimisation: Way forward for the oil and gas industry post-COVID-19’.

The SPE boss said:  “At the beginning of the year, we witnessed what is probably the most interesting asset transfer of the decade,” he said, adding that to see such a big divestment in what was supposedly a difficult period indicated that there could be more on the way.

“So, we see this as a clear example of portfolio optimisation on the part of the one who is divesting the asset and also on the part of the one acquiring the asset”, noting that optimisation can go either way; “it is just for better efficiency. So, we think this is something that could be on the cards more based on the current reality.”

According to him, a lot of assets and production facilities are ageing, and some of them are better managed by structures that have smaller overheads.

He said, “So, we think there could be a shift of some of these smaller assets. And, of course, you know that the marginal field bid round is also in progress, and this is part of what informed this kind of thinking, in the sense that a lot of companies are going to be operating in the marginal field space.

“There will be an exchange of assets or change of ownership as the situation evolves. My understanding is that there are a lot of new players that are coming on board, and so we expect that there will be some activity in that area of portfolio optimisation.”

In what is the latest divestment in the nation’s oil industry, three international oil companies sold their combined 45 per cent interest in Oil Mining Lease 17 and related assets in the Eastern Niger Delta to TNOG Oil and Gas Limited, an integrated energy company founded by Mr Tony Elumelu.

Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited assigned their interests of 30 per cent, 10 per cent and five per cent respectively in the lease to TNOG Oil and Gas.

Source PUNCH
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