FG Ready to Approve Shell’s $2.8bn Assets Sale Deal with Oil Consortium, Says Lokpobiri

Emmanuel Addeh in Abuja

In what appeared a clean break from the past, the Federal Government has said it is willing to immediately approve the $2.8 billion onshore oil assets sale agreement between Shell and a consortium of oil companies in Nigeria.

The Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, in a statement signed by his Special Adviser on Media and Communication, Nneamaka Okafor, said that the government was only awaiting the document detailing the terms of the deal to give its consent.

Speaking on the sidelines of the ongoing World Economic Forum (WEF) in Davos, Switzerland, Lokpobiri affirmed that the decision was part of the Nigerian government’s commitment to fostering a business-friendly environment in the oil and gas sector.

Shell had, a few days ago, announced the deal involving the sale of its onshore assets to a consortium of five companies, including four owned by Nigerians and one foreign firm, saying it will now be focusing on its deep water operations.

Lokpobiri emphasised that the Nigerian government will not impede legitimate business transactions in the oil and gas sector, adding that: “On the part of the government, once we get the necessary documents, we will not waste time to give the necessary considerations and consent.”

Responding to concerns about International Oil Companies (IOCs) diversifying their onshore assets, the minister highlighted the positive aspects of the diversification.

He noted that Nigeria loses nothing as such moves create opportunities for indigenous companies with the capacity to acquire and professionally manage these assets, leading to increased profitability and the maximization of their potential.

Addressing potential negative impacts on the country, Lokpobiri reassured Nigerians that the diversification would not adversely affect Nigeria.

He emphasised the government’s engagement with IOCs regarding the decommissioning of non-productive assets and abandonment issues. 

The minister stated that concerns raised by IOCs, particularly with Nigerian banks, have been addressed, assuring stakeholders of a safe environment for the handling of funds related to decommissioning and abandonment.

“As a government, we will adhere to the law without jeopardising legitimate  businesses,” he added.

Responding to questions on preventing IOCs from diversifying their upstream operations, the minister clarified that companies have not left their upstream deep water assets.

Instead, he said they are diversifying their onshore assets, creating opportunities for local companies with developed capacity and financing to acquire and profitably manage the assets.

The minister reiterated the government’s commitment to addressing sector concerns, including insecurity and aging infrastructure, such as pipelines. 

He highlighted ongoing engagements with companies to invest in pipeline technology and other critical infrastructures within the oil and gas value chain.

Lokpobiri concluded by announcing that the president has approved a licensing bid round, demonstrating the government’s dedication to initiating the process promptly.