Kachikwu Explains Why Oil Majors are ‘Pulling Out’ of Nigeria

Akanimo Sampson

Akanimo Sampson

Former Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has explained why oil majors are pulling out of Nigeria, noting that the Anglo-Dutch oil and gas major, Shell, and the American oil giant, Exxon Mobil have divested some of their Nigeria assets in the past few years citing the need to diversify their portfolios.

Kachikwu says there is the need for the companies to be engaged in further discussions regarding the move, pointing out that the divestments of assets by some oil majors is beyond the global push for the energy transition.

He was speaking at a Chief Executive Officer Round Table Session at the ongoing Nigerian International Energy Summit (NIES) in Abuja with the theme: Strategies for Confronting the Energy Transition

The ex-petroleum minister however, notes that the sale of the assets was beneficial to Nigerian companies and will deepen local participation in the oil and gas space, adding that the successful completion of the 2020 marginal Oilfields bid round and the passage of the Petroleum Industry Act were huge milestones for the Federal Government.

While Kachikwu emphasised the need to improve domestic refining capacity by rehabilitating the existing refineries and supporting private-owned refineries such as the Dangote Refinery being constructed in Ibeju Lekki, Lagos, he said Nigeria must look at efficient ways to improve oil and gas production and speed up the development of production now, especially with the rise in crude oil prices.

He said energy transition was inevitable and Nigeria must prepare for it by focusing on its abundant gas resources, and on the funding constraints for the development of oil and gas projects due to the global energy transition, Kachikwu recommended the setting up of a special fund for such purposes.

For the Group Managing Director of Nigerian National Petroleum Company Ltd (NNPC), Mele Kyari, the government will continue to engage the IOCs to ensure that any divestment does not lead to a loss of value to Nigeria.

The NNPC chief said the government had put measures in place to check oil theft, adding that it would not relent until the situation was brought under control.

He said the government had adopted gas as Nigeria’s energy transition fuel and was investing massively in gas infrastructure toward deepening gas utilisation in the country, adding that the projects include the Obiafu-Obrikon-Oben (OB3) and the Ajaokuta-Kaduna-Kano pipelines to deliver gas into the domestic market.

On his part, Leye Falade, the General Manager, Production, Nigeria LNG Ltd. (NLNG), reiterated the company’s commitment to improving domestic gas consumption in Nigeria.

Falade said the NLNG had in 2021 signed a Sales and Purchase Agreement with three indigenous power companies to deliver 1.1MTPA of gas for them to supply power to industrial clusters. #IOC Exits from Nigeria Beyond Energy Transition

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