The Chairman, Seplat Petroleum Development Company, Dr. A.B.C. Orjiako, has said that indigenous exploration and production companies will remain the preferred buyers in onshore and shallow waters asset divestments by international oil companies operating in the country.
He was in a statement on Wednesday quoted as making this assertion at the PWC Oil and Gas leadership conference held in Accra, Ghana.
According to him, the indigenous oil companies contribute about 10 per cent of Nigeria’s total production of 2.5 million bpd.
He attributed the increased production levels from the indigenous companies to the recent divestment by IOCs in the country.
IOCs have been reviewing and reducing their commitment to onshore and shallow assets in Nigeria due to rising oil theft and insecurity and this has led to a lot of divestments.
In the past four years, IOCs have divested not a few of their oil assets in Nigeria, earning over $7bn from the sales.
Chevron is in the process of selling three onshore oil blocks, while ConocoPhillips agreed to sell its Nigerian operations to Oando for $1.8bn last year.
The Shell joint venture has sold a series of blocks since 2010 for more than $2bn and it plans to sell Oil Mining Licences 18, 24, 25 and 29.
In 2012, Shell, Total, ConocoPhillips and Agip divested part of their stakes in the oil and gas industry.
Orjiako, who stated that the new phenomenon gave rise to Seplat, added that Nigerian independent firms would remain preferred buyers in onshore and shallow waters IOC asset divestments.
“Local company led-consortiums are expected to continue being the beneficiaries of divestitures of onshore/shallow offshore oil blocks by the IOCs, who favour deep-water acreage because of their natural advantage in terms of technology, experience and financial capacity,” he added.
Looking at the production landscape and output levels, Orjiako noted that aside NPDC, which is a government-owned operator, “Seplat is the highest with 52,800 bpd from three fields while Conoil is second with 25,000 bpd from two fields and Midwestern with 13,000 bpd according to a publication of Africa oil and gas report.”
He expected that indigenous oil and gas operators would grow their 10 per cent production share to 20 per cent in the next five years.
“In the next five years, indigenous companies will contribute 20 per cent of the nation’s oil and 40 per cent of domestic gas supply. They are likely to be responsible for 100 per cent supply for domestic refining by 2020,” he asserted.
Orjiako said indigenous E&P companies would continue to break new grounds in the upstream oil and gas space, helping to integrate value in areas such as monetisation of gas, small scale refining and ability to handle local communities.
“Seplat has grown from marginal field operatorship to acquisitions via the Platform/Seplat, NPDR & WSP/ND West,” he said.
Describing the marginal fields programme as a huge success, Orjiako said that the future was bright for Nigerian independents because they would continue to “unlock small-sized reserves, feed the domestic market and provide long-term domestic energy security with many of them playing key roles in LPG, natural gas and refining.”
Information from Punch was used in this report.