The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, on Tuesday said that the recent gale of divestments in the oil and gas sector in Nigeria was already yielding the expected results in terms of increased crude production.
Lokpobiri maintained that divestments are part of the energy business, expressing his pleasure that under the current administration of President Bola Tinubu, several divestment deals that had lingered for years had been successfully concluded.
These completions, he said, have led to a measurable increase in the national production output, demonstrating clearly that divestment, when properly structured, is in Nigeria’s best interest.
Lokpobiri spoke while receiving a delegation of the Independent Petroleum Producers Group (IPPG) leadership, which visited him to commend Tinubu for his support to their members who recently acquired the assets from the International Oil Companies (IOCs), according to a message posted on his X handle.
According to him, this is more so, given that such divestments were not entirely out of Nigeria, but rather a shift to deepwater operations, where it has become a win-win for us on all fronts.
He reiterated the federal government’s commitment to supporting indigenous companies in future divestment engagements with International Oil Companies (IOCs), however emphasising that there is no alternative to increasing production than for those who have acquired these assets to re-enter inactive wells.
He described it as the way forward, expressing happiness that some of them had already begun the process, even as he encouraged members of the group to stay aligned with Nigeria’s collective push to transform the energy sector.
“The best thing to do was to vigorously ensure that those divestments happened. It’s common sense. If we are going outside the country to canvas for investors, we should also be allowed to divest. That is global best practice.
“My intention is to engage IPPG individually and say what is your plan now that you have acquired these companies. There are so many fields that are (dormant) because of the protracted period of divestments that the IOCs decided not to do anything.
“Our ultimate objective, which is already happening, is to see how we can ramp up production. So, the government will commit to collaborate with IPPG members and all stakeholders in the industry to ensure we work together and justify the decisions to allow these divestments,” he stated.
Meanwhile, the Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, also on Tuesday, hosted the high powered delegation from the IPPG), led by its Chairman, Abdulrazaq Isa, a statement by his spokesman, Louis Ibah, said.
Ekpo lauded IPPG for the important role they play in the gas value chain, noting that as indigenous investors, they not only create jobs in the country but also plough their profits back into the economy to support the nation’s agenda of repositioning the energy sector for sustainable development.
The minister pledged the federal government’s support in resolving the challenges affecting the group’s operations and called for enhanced collaboration between the group, government, and regulatory agencies to foster growth and development.
IPPG Chairman, Isa, in his speech, thanked Tinubu for appointing members of the group into key positions in the Nigerian National Petroleum Company Limited (NNPC) and the Organisation of Petroleum Exporting Countries (OPEC).
Isa also solicited the intervention of the federal government to resolve issues around key areas like gas pricing, gas flare penalty, legacy debt, gas infrastructure, gas supply receivables, and Liquefied Petroleum Gas (LPG) availability to encourage upstream investment and move the sector forward.
The chairman was accompanied by other IPPG members including: Dada Thomas (Frontier CEO), Gbite Falade (Aradel CEO), Lanre Kalejaiye (ND Western CEO) and Dapo Filani (Waltersmith Petroman CEO),
Others were: Trost Amos (Renaissance Africa), Chikaodili Okoye (Seplat), James Makinde (Seplat), Sunday Okunbor (ND Western), Nkiruka Ajah (Waltersmith), and Oyeleke Banmeke (IPPG Secretariat).
Emmanuel Addeh
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