Agip, Equinor Assets’ Sale Deals Completed in Major Breakthrough for Nigeria’s Oil Sector

•Nation’s rig count rises to 34 on increasing upstream activities   

•NNPC says incessant summoning of investors by National Assembly hobbling investment

Emmanuel Addeh and Peter Uzoho in Abuja

In a major boost for Nigeria’s oil and gas sector, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday announced that it had completed all regulatory processes for the assets sale between Eni’s Nigerian Agip Oil Company (NAOC) as well as that between Equinor and Chappal.

The Gbenga Komolafe-led organisation also stated that documents submitted by Shell Petroleum Development Company (SPDC) in its $2.4 billion deal were undergoing due diligence by the commission, pending approval.

On the Mobil Producing Nigeria (MPN) and Seplat $2.4 billion oil assets’ sale, Komolafe, who spoke on the last day of the Nigerian Oil & Gas (NOG) Week in Abuja, explained that the latter opted for ministerial consent before finalising pending issues with the commission.

Komolafe, who spoke on the topic, “Defining the Outlook for Deepwater Exploration and Production in Nigeria,” revealed that the signing ceremonies for the two deals would come up days from now.

In November last year, the Norwegian state-owned multinational energy company, Equinor, said it had inked a deal with Nigerian-owned Chappal Energies, allowing the latter to acquire its business in Africa’s biggest oil producer.

The transaction included Equinor Nigeria Energy Company’s 20.2 per cent stake in Chevron-operated Agbami, the country’s largest deep-water oilfields. Equinor holds a 53.9 per cent interest in oil & gas lease OMLs 128 and 129.

Two months earlier, Oando Plc said it had reached an agreement with Eni on the acquisition of a 100 per cent stake in its subsidiary, Agip.

The transaction is expected to expand Oando’s current participating interests in oil mining leases (OMLs) 60, 61, 62, and 63, from 20 per cent to 40 per cent.

Komolafe added, “As a matter of fact, I find it necessary to announce here this afternoon, how we are always very willing to inform the industry about the status of our activities. So, as regards the status of the four divestments, the first, the Oando divestment, I’m happy to announce that the exercise has been completed, as I speak to you, and the signing ceremony will be conducted in a few days.

“In a likewise manner, the divestment involving Equinor and Chappal is equally completed and the signing ceremony will be conducted in the coming days, equally. So, we can celebrate that.

“As regards the divestment of SPDC to the group for renaissance, the status is that the regulator has received the documentation and the transaction is currently underway in the industry. So, we hope that it will be gradually positioned to be announced in a few months.

“Then, regarding the divestment, the transaction involving Mobil and Seplat, currently, the company has expressed commitment to proceed to apply for ministerial consent to conclude the documentation to the commission.

“So, the position I’m expressing here is that the NUPRC, as the regulator, as we speak, is yet to receive the documentation for due diligence in respect of Mobil and Seplat transaction.”

He added that whereas Nigeria’s oil rig count fell to as low as eight in 2021, it had recently soared to as many as 34 as of June 24, underscoring the increasing activities in the upstream sector.

On the commission’s “High Impact Achievements”, the NUPRC chief executive stated that it conducted an industry-wide integrated study on the re-activation of shut-in strings in Nigeria to unlock 700,000 barrels per day (bpd), while approvals were granted for well interventions and re-entry operations with potential to develop greater than six million barrels (mmb) of oil and five trillion cubic feet (TCF) of gas.

Komolafe added that NUPRC approved field development plans for additional production from four fields with peak potential of circa 125 thousand barrels of oil per day (mbopd).

He said NUPRC also accelerated the approval and commissioning of four Alternative Crude Oil Evacuation Routes (ACOER) with a total combined capacity of about 250mbopd as well as engaged the E&P companies on unlocking about 57TCF of uncommitted or “unmonetised” gas reserves, among many others.

Earlier, on a separate panel, themed, “Accelerating Investment, Enabling Industry Growth, Meeting Energy Demand,” Chief Financial Officer, Nigerian National Petroleum Company Limited (NNPCL), Umar Ajiya, said incessant invitations extended to operators in the oil industry was hobbling investment in the sector.

Ajiya was speaking on issues negatively affecting foreign investment in Nigeria’s oil and gas sector.

Equally speaking during a panel session on “Defining the Outlook for Deepwater Exploration and Production in Nigeria”, Country Chairman and Chief Executive Officer of TotalEnergies EP Nigeria Limited, Mr. Mathieu Bouyer, said the Service Level Agreement (SLA) signed in September 2023 between NNPC and the international oil companies (IOCs) on contracting process SLA signed proved to be efficient on the Ubeta development project.

TotalEnergies and NNPC recently signed the Final Investment Decision (FID) on the Ubeta project, marking the first of such FIDs after the Presidential Executive Orders on Oil and Gas development.

Bouyer pointed out that Nigeria was gifted with a lot of oil and gas resources, saying the country has large deep-water industry with large resources developed and yet to be developed.

He stated that TotalEnergies was a large operator in Nigeria’s deepwater space, with Egina and Akpo, and developed Usan for transfers operatorship.

He maintained that all significant deepwater projects were developed with past contractual and fiscal conditions, noting that the deepwater segment in Nigeria has been stuck for 10 years since the FID on Egina project.

However, the TotalEnergies’ boss raised concerns bordering on increased levels and changes in fiscal terms, saying lack of contractors’ competition is pushing costs of project delivery high.

On what was needed to move the Nigerian deepwater industry forward, Bouyer advised the federal government to replicate similar fiscal terms provided for Non-Associated Gas (NAG) development.

He acknowledged the recent policy reforms of the government, particularly the executive order issued in March, being implemented through the Special Adviser to the President on Energy, Olu Verheijen, and NUPRC.

The TotalEnergies’ CEO stated that owing to the executive order, the company and its partners managed to sanction the Ubeta project in June.

According to him, “It shows that when a sound measure is taken, investment comes.”

He added, “Today, each company capable to work in deepwater is benchmarking these opportunities versus portfolio alternatives. So it’s important to be competitive and agile to accommodate requirements. Resources will not disappear, they are here but they will be pushed to a later stage while the country needs them now.”