In the last 10 years, Nigerian oil companies have acquired approximately 26 oil mining licenses in the Niger Delta basin area. This was announced by Engr. Simbi Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board, during a summit in Abuja.
Wabote revealed that major divestments, including those planned by Shell and ExxonMobil, have opened up opportunities for local companies to acquire oil and gas assets worth billions of dollars. He emphasized that divestments are not negative, but rather a way to utilize the local capacities and capabilities that have been developed through local content implementation. The acquisition of these assets will also lead to the injection of new capital and an increase in crude oil production.
Wabote highlighted the benefits of these divestments, such as the creation of direct and indirect employment opportunities by indigenous companies and their service providers. He noted that these divestments demonstrate that Nigerians and indigenous companies have the technical, managerial, and financial capabilities to compete in the international market. Additionally, the involvement of Nigerian financial institutions in these transactions represents efficient capital deployment and capacity building on an international scale. This applies to various areas such as legal services, insurance, government relations, employee relations, and community liaison.
However, Wabote also acknowledged the challenges faced during the divestment exercises. These challenges include the time required to obtain necessary regulatory approvals and the interests and concerns from various stakeholders such as political groups, legal bodies, communities, and labor unions. Another challenge is the potential disruption of oil and gas production and the possibility of job losses. Additionally, there may be difficulties in accessing the latest technology if the new investors lack technical expertise or support from original equipment manufacturers. Managing legacy issues and liabilities related to the environment, communities, and social commitments is another concern. Furthermore, new investors may face pressure to recoup investments on time to address financial requirements.
Wabote assured that the Nigerian Content Development and Monitoring Board will continue to collaborate with industry stakeholders to establish regulations that ensure the increasing ownership of indigenous oil and gas production companies does not lead to a decrease in Nigerian content compliance.