FG will approve Shell’s onshore divestment, says Oil Minister

The Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri has disclosed that the Federal Government will consent to and approve the agreement reached between Shell and a consortium of five Nigerian companies for divestment of Shell’s onshore assets, when it receives all the necessary documents.

Lokpobiri in a statement by his media aide noted that the government would not impede the transfer of the assets as the divestment would create opportunities for local companies to operate in the sector.

Shell had two days ago announced that it had reached an agreement to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited, SPDC, to Renaissance.

Renaissance is a consortium of five companies made up of ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin. It said the completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions.

The Minister who spoke on the sidelines of the World Economic Forum in Davos, Switzerland, said the country would lose nothing with the agreement.

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He has affirmed the Nigerian government’s commitment to fostering a business-friendly environment in the oil and gas sector, emphasizing that the Nigerian government will not impede legitimate business transactions in the oil and gas sector.

He pointed out 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”.

He emphasized that the government was engaging with IOCs regarding the decommissioning of non-productive assets and abandonment issues, adding that the concerns raised by IOCs, particularly with Nigerian banks, have been addressed, assuring a safe environment for the handling of funds related to decommissioning and abandonment.

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

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The Minister clarified that the oil companies have not left their upstream deepwater assets but were instead diversifying their onshore assets, creating opportunities for local companies with developed capacity and financing to acquire and profitably manage these assets.

Meanwhile, during his speech at the 54th Annual Meeting of the World Economic Forum in Davos, Switzerland, Senator Lokpobiri, emphasized Africa’s measured stance on the global transition from fossil fuels to renewable energy.

The Minister, who pointed out that Africa’s contribution to global emissions stood at a modest 3%, urged against precipitous actions that could impede the continent’s economic growth.

“Africa, including Nigeria, cannot hastily transition with aid or grants. What we need is strategic investment in our fossil fuels sector to bolster our economy and ensure energy security”, he stated.