The Nigerian Upstream Petroleum Regulator Commission (NUPRC) has given the nod for selling two onshore petroleum assets owned by international companies.

NUPRC gave the nod for deals on the trade of the two onshore assets owned by International Oil Companies (IOCs) to Oando and Project Odinmim to purchase these assets.

Through the approved deal, Nigerian Agip Oil Company (NAOC) the local subsidiary of Eni will be able to sell their onshore assets to Oando. Project Odinmim a new entrant into the oil and gas market will also acquire assets through this deal.

The sale of these two assets has been pending for months due to some delays in regulations that expect the IOCs to meet some standards before the sale can be approved. The deal has been delayed for months.

The go-ahead for the deal to be signed was announced at an energy conference in Abuja by Engr. Gbenga Komolafe the Chief Executive of NUPRC. However, the specific date on which the deal will be signed has not been revealed by NUPRC.

A major concern for IOCs leading to a decision to sell their assets is the situation of theft on the onshore fields and vandalism of assets.

Some other international oil companies such as Shell and ExxonMobil are also in talks with local oil companies to sell their assets to them.

ExxonMobil is in talks with Seplat, a Nigerian-owned oil company to sell their 1.3-billion-dollar asset to them. Shell is negotiating with Renaissance to sell its onshore assets to them.

The onshore IOCs have been exiting their assets to move to offshore fields where issues relating to vandalism, theft, and pollution can be better managed. This will allow for more local participation in onshore crude oil production.

Eni’s Deal With Oando

The decision by Eni to sell its Nigerian subsidiary NOAC was announced in September 2023. However, the deal could not go through as the Nigerian National Petroleum Company (NNPC), holding 60% shares, did not approve the deal.

NNPC which holds the largest share, floated its rights of first refusal on the licenses. This led to a stall in the deal.

In the announcement made in September by Eni, four onshore oil leases were to be sold to Oando under the agreement.

Some reasons given for the delay in the approval of the deal by NNPC were the need for Eni’s NOAC to meet their obligations in terms of taking responsibility for spills and compensating communities affected by their activities.

According to the Chief Operating Officer of Oando, Alex Irune, the news about the approval is a piece of welcoming news to the organization.

Mr. Alex Irune also stated that out of the four onshore assets being sold, only two have been approved by the NUPRC. The other two onshore assets are on hold by the NUPRC.

The deal between Eni and Oando is estimated to cost 500 million US Dollars, the total interest in four assets Eni is selling. The four licenses being sold by Eni are OMLs 60, 61, 62, and 63.

Out of the four licenses being sold, NUPRC did not state the specific licenses that have been accepted to be sold. However, they have assured all stakeholders the deal will be completed in a few days and all important details will be announced.

Nigerian oil production has been in a downturn in the past year with Nigerian oil companies producing below the capacity of 2 million barrels per day. The country is currently producing 1.502 million barrels of crude oil per day.

This shows the country’s crude oil production has reduced by 4.49% from May 2024 output. To improve the country’s total crude oil output to the target of 1.7 million barrels per day, the NUPRC and the NNPC are putting in place policies that will help to meet this target.

The nod to the Eni and Equinor deals will help the country achieve its goals as the new investors will inject new energy and resources into Nigeria’s onshore oil.