*Chevron, TotalEnergies have options to divest

Sopuruchi Onwuka

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Investors and players shopping entry opportunities in the upstream petroleum industry may prepare to take the inorganic route as ongoing reviews by the nation’s acreage administrator may push international oil companies to give up more onshore assets.

Oracle Intelligence gathered from reliable sources that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is currently reviewing activity levels on existing oil blocks mainly in the onshore, swamp and shallow water terrain.

The NUPRC which has rolled off annual bid rounds for oil blocks, we gathered, is filling out its data with dormant oilfields and undeveloped discoveries that sit the portfolios of mainly international oil companies (IOCs).

The revelation comes as more industry players commend the NUPRC on improved processes, enhanced and speedy response to operator’s issues, as well as recent conversion of the Petroleum Prospecting Licenses (PPL) to a Petroleum Mining Lease (PML).

The discussions on recent information pouring out from NUPRC engaged Nigerian delegates at the ongoing AOW Energy Week in Accra, Ghana.

Oracle Intelligence reports that the conversations centered on how the industry is responding to policy mandates on boosting the nation’s petroleum liquids output by over a million barrels per day in the short term, and how quickly the Ingentia consortium can overcome above ground challenges and start making contribution from OML 66.

The chats spread out to how similar oilfields in the country could be harnessed and put back on production.

Our correspondents gathered that the NUPRC is already working to recover dormant oilfields from some international oil companies still sitting on onshore and shallow water assets in the country.

The move when activated is most likely to push companies like TotalEnergies and Chevron into divestment of inactive oilfields in their leased acreages.

The NUPRC is empowered by law to enforce the recover dormant oil and gas assets if the licensed operators fail to commit investments in their development over specific timelines.

Whereas companies like Shell, Eni and ExxonMobil have completed full divestment of their operated stakes in the conventional terrains to focus on the deepwater; Chevron and TotalEnergies still retain operated interests in the Nigerian Delta.

The two companies have however sold off some non-operated interests and stranded assets in previous divestments.

“Every indication is that the two companies will quickly divest their dormant assets instead of allowing NUPRC to recover them,” one of the industry captains later told Oracle Intelligence privately.

A senior official in NUPRC confirmed that a audit of dormant oil assets in the country was ongoing. He however stressed that the agency was encouraging operators to commit investments in their development.

He said recovery, as part of the drill-or-drop agenda, would come as last resort.

In whichever case, the ongoing exercise by the regulator presents good growth opportunities for existing players and rare entry doors to new companies to join the highly rewarding upstream play.