Nigeria to divest 26 oil blocks of 8.211m barrels reserves

The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, said on Friday the International Oil Companies (IOCs) have proposed the divestment of 26 oil blocs with 8.211 million barrels of oil reserves to indigenous companies.

Komolafe, who stated this at the Industry Dialogue on IOCs Divestment of Oil and Gas Assets in Abuja, said the NUPRC had also engaged two leading global oil and gas decommissioning consultants to carry out due diligence on the proposed 26 oil blocks to be divested.

The commission organised the workshop to guide and consider due diligence and interrogation on compliance with the laws and processes that governed the proposed divestment of oil and gas assets.

The NUPRC chief said the blocs have an estimated total reserve of 8.211million barrels of oil, 2,699 million barrels of condensate, 44,110 billion cubic feet of associated gas and 46,604 billion cubic feet of non-associated gas.

Komolafe said: “Additionally, these blocs contain P3 reserves estimated at 5,557 million barrels of oil, 1,221 million barrels of condensate, 14,296 billion cubic feet of associated gas, and 13,518 billion cubic feet of Non-Associated Gas.

READ ALSO: Falana: Assigning Oil Blocks to IOCs, Individuals Unconstitutional

“It is worth noting that a substantial part of the P3 reserves is located in or near producing assets. This means that a competent successor can easily mature them to 2P reserves.

“Additionally, the current average production from these blocks is 346,290 barrels per day (bpod) (NAOC-28,018 bpd, MPNU-159,378 bpd, EQUINOR-36,155 bpd and SPDC-122,739 bopd).

“But the technical production potential is much higher – standing at 643,054 barrels (NAOC-147,481 bpd, MPNU-244,268 bpd, EQUINOR-39,203 and SPDC-212,102 bopd).

“These blocs have the potential to significantly boost our national production, which will benefit all stakeholders.”

He listed the leading global oil and gas decommissioning consultants to include S&P Global Commodity Insights (SPGCI), and Boston Consulting Group (BCG).

Komolafe said that the consultants would also work with the commission as independent consultants in defining all end-of-field life and abandonment legacy liabilities in compliance with divestment guidelines.

“They will also manage the operational risk across the entire asset portfolio, and create a workflow for estimating total onshore decommissioning CAPEX liabilities.

“They will determine the host community’s obligations based on three percent OPEX stipulated in the Petroleum Industry Act (PIA), benchmark best practices on asset sales, and provide case study reports that draw lessons based on best practices, ” he concluded.

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