Group Managing Director (GMD) of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari, has said international oil companies (IOCs) that divest from Nigeria’s upstream sector must address issues of abandonment and decommissioning of oil assets.
Kyari announced this on Monday in Abuja, at the opening session of the fifth edition of the Nigerian International Energy Summit.
The comment by the NNPC boss comes about six months after he had highlighted key guidelines that would guide the evaluation of would be replacement of divesting partner in the oil and gas industry.
The GMD had in August last year, while speaking at the Nigeria Annual International Conference and Exhibition, said learning from previous experiences, the NNPC had developed requisite divestment policy that will provide clear guidelines and criteria for divestment of partners’ interest in all its joint venture and production sharing contracts arrangements.
To ensure that the NNPC sustains a prosperous business environment for Nigeria, he had said the national oil company would pay particular attention to abandonment and relinquishment costs; severance of operator staff; third party contract liabilities; and competency of the buyer.
On the wave of divestment of international oil companies from Nigeria’s upstream sector, the NNPC boss told participants at the conference that while the country understands the right of companies to freely divest, it was, however, critical to ensure that the right thing is done so as to avoid disruption.
He further said that issues and obligations related to abandonment and decommissioning must be fully addressed and discharged in line with global best practices, regulations, convention, and law. He said,
“Companies that are divesting, they are leaving our country literarily and that’s the way to put it. But they are not leaving because opportunities are not here, these companies are shifting their portfolios where they can add value and not just that but where they can add to the journey of net carbon zero emission.
“We understand this very perfectly. But also, we cannot afford to realise that this country must benefit from the realities of today.
“We will work with our partners, we understand the necessity for their investments, we do know that there are issues, we understand that this must take place, but also it must be done in such a way that we are able to deal with issues around abandonment and decommissioning.
“We will also make sure that whatever arrangement that is put in place, will show that we are also alive to the energy transition journey that we have embarked on.”
The NNPC CEO acknowledged the need for cleaner energy globally, but said that the African continent must shape its narrative to reflect on its realities, including the high level of energy poverty, deficiency of critical infrastructures for electricity and transportation.
He confirmed that NNPC with partners were working together to ensure the attainment of Nigeria 2060 target for carbon neutrality.
– Media Report