Oando: Ongoing Oil, Gas Divestments in Nigeria Inevitable

*Harps on need for collaboration

Emmanuel Addeh in Abuja

Oando Energy, one of Nigeria’s foremost companies operating in the oil and gas space has said that the current ongoing divestments in the industry were inevitable.

The company made the positive known at the recently concluded Society of Petroleum Engineers (SPE) 2024, Nigeria Annual International Conference and Exhibition (NAICE), which held in Lagos, according to a statement from the firm.
Speaking at the Workshop, General Manager, Commercial, Oando Energy Resources, Akinbambo Ibidapo-Obe, shared Oando’s strategies and preparations for the International Oil Companies (IOCs) divestment, underscoring the company’s proactive approach.

He described the current spate of divestments as an inevitable reality indigenous companies have been actively preparing for.
“Where we are now is a confluence of opportunity and preparation. The government has been deliberate about ensuring the transfer of knowledge from the IOCs to the indigenous companies over the years.
“Oando, along with other indigenous companies, has also proven its technical abilities to operate and manage these assets through the marginal fields program and earlier divestments.

“ It is now time for indigenous companies to step up, prove themselves on this global stage and drive significant growth and innovation in the industry,” said Ibidapo-Obe.
The three-day conference, themed ‘Petroleum Industry Value Chain Optimisation: The Inevitability of Midstream and Downstream Development, ‘ was sponsored by IOCs and indigenous energy companies like Oando, Seplat, and Aradel, amongst others.
The conference entreated attendees to workshops, panel sessions, an award and gala night, as well as networking opportunities.

In attendance were the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri; the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo; the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari; the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed; and the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, among other stakeholders.
A key highlight of the conference was the topical issues workshop, a session that explored the theme ‘The Outlook of the Nigerian Oil and Gas Industry, Post IOC Divestment and Exits: Opportunities and Challenges’.

The session delved into the recent spate of IOC divestment and its implications for the country and Indigenous players, providing valuable insights and strategies for the future.
For over a decade, oil majors in Nigeria have pursued divestment strategies, focusing on exiting the shallow water and onshore sectors while maintaining interests in the deep waters and downstream sectors.
In February 2022, Seplat Energy announced an agreement to acquire ExxonMobil’s entire share in its shallow water business—Mobil Producing Nigeria Unlimited (MPNU).

In September 2023, Oando disclosed that it had signed a deal to acquire Eni’s subsidiary, Nigerian Agip Oil Company Limited (NAOC).
 In November 2023, Norwegian oil company Equinor announced that it had sold its Nigerian entity to Chappal Energies, the end of Equinor’s three-decade association with Africa’s largest oil producer, to name a few.

Also at the conference, the plenary session themed ‘Unlocking Upstream Value: Developing Markets, Trade Access, and Facilitating Partnerships in the Midstream and Downstream’ was addressed by the seasoned panellists.
The engaging dialogue resulted in a wealth of perspectives, strategies and recommendations for optimising value creation across the Nigerian oil and gas industry, including specific strategies for developing markets, enhancing trade access, and fostering partnerships.

General Manager, SubSurface, Oando Energy Resources,  Babafemi Onasanya,  representing Dr. Ainojie’ Alex’ Irune, Executive Director, Oando PLC and Chief Operating Officer, Oando Energy Resources, expressed that partnerships were not just critical, but essential to the development of the sector.

He highlighted the industry’s reliance on Joint Venture (JV) partnerships between operators and the Nigerian government, underscoring the importance of collaboration and shared goals.

“As more indigenous players take up prominent roles in the industry, they will need to secure key partnerships in critical areas for efficiency and sustainability.

“The first necessary partnership is with financial advisors/offtakers to either fund the capital-intensive nature of the business, or to provide advisory to source and secure funding.

“The second is a deliberate, engaging and adaptable partnership with host communities to encourage better dialogue and impact. Lastly, we need strategic partnerships with technology partners to address different areas of specialisation,”  remarked Onasanya.