Indigenous Oil Firms Secure 26 Oil Licenses in the Niger Delta, Paving the Way for Prosperity

Over the past decade, Nigerian oil companies have successfully obtained approximately 26 oil mining licenses within the Niger Delta basin region. This significant development was disclosed by Engr. Simbi Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board, during the 2023 Petroleum and Natural Gas Senior Staff Association Energy and Labour Summit held in Abuja on Wednesday.

Wabote highlighted that ongoing divestment activities include plans by industry giants such as Shell and ExxonMobil to divest oil and gas assets valued at billions of dollars. Additionally, in September, Eni announced an agreement with Oando Plc for the sale of interests in six onshore blocks and the Okpai gas power plant in Delta State.

The Executive Secretary emphasized that these divestments are not inherently negative; instead, they present an opportunity to leverage the local capabilities and capacities cultivated through the implementation of local content policies within the upstream sector.
Wabote outlined a range of benefits stemming from these divestments, including the injection of new capital, the revitalization of divested assets, and an increase in crude oil production driven by technological investments from acquiring firms. These transactions also create direct and indirect employment opportunities, both within indigenous companies and their service providers.

He underlined that these divestments signify that Nigerians and indigenous firms have matured and acquired the technical, managerial, and financial capabilities to compete on a global scale. He also noted that the involvement of financial institutions in these transactions represents efficient capital deployment and capacity building on an international level, applicable to various aspects such as legal services, insurance, government relations, employee relations, and community engagement.

In addition to the opportunities, Wabote acknowledged the challenges encountered during divestment exercises. These challenges encompassed the time required to secure necessary regulatory approvals, as well as substantial interests from various groups, including political, legal, community, and labor.

Other challenges included the potential disruption of oil and gas production, job losses, and the need for new investors to have technical expertise or support from original equipment manufacturers, especially in accessing the latest technology.

Wabote also highlighted concerns regarding the management of legacy issues and liabilities related to the environment, communities, and social commitments. Furthermore, he discussed the pressure on new investors to recoup their investments within a reasonable timeframe to offset loans and address financial requirements.

The Executive Secretary assured that the Nigerian Content Development and Monitoring Board would continue to collaborate with industry stakeholders to establish regulations that ensure the expanding role of indigenous oil and gas production companies does not compromise Nigerian content compliance.