June 22, 2024
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OIL & GAS

NUPRC Offers Accelerated Approval for Major Oil Companies

Exxon Mobil, Shell, TotalEnergies, and Eni, aiming to exit Nigeria’s onshore oil operations due to security concerns, may receive quicker approval by taking responsibility for spills, according to a statement from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Friday.

Gbenga Komolafe, the chief of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), proposed a short-term option during a meeting in Abuja, offering faster approval if the companies commit to spill cleanup and community compensation.

“We have the undertaking here. The consent here though fixed for June, could be much shorter,” Komolafe stated. “If you agree to take that option, you sign the undertaking knowing that there are obligations to be fulfilled.”
The alternative long-term option involves awaiting NUPRC to ascertain and allocate liabilities, potentially prolonging final approval until August.

NUPRC aims to balance expediting the exit for oil majors with safeguarding the environment, local communities, and the assets’ long-term viability.

The companies are currently evaluating the options and plan to respond soon. However, analysts caution that the accelerated option could entail significant costs for cleanups and reparations.

“The risk with option 1 is the transferor will continue to take responsibility for the asset until the process is completed while option 2 puts them at the mercy of the regulator since they waived their right to deemed approval,” explained Ayodele Oni, an energy lawyer at Lagos-based Bloomfield law firm.
NUPRC Initiates Evaluation of Shell’s Onshore Asset Divestment

As the majors prepare to depart, a total of 26 onshore blocks, holding substantial reserves of oil, condensate, and gas, are up for grabs, according to NUPRC.

Komolafe emphasized the importance of ensuring that companies acquiring these blocks possess the necessary financial resources and technical expertise for responsible management throughout their lifecycle.
NUPRC has enlisted the services of two global oil and gas decommissioning consultants, S&P Global Commodity Insights and Boston Consulting Group, to conduct due diligence on the assets slated for divestment.

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