By Muyiwa Lucas

The Nigerian National Petroleum Corporation (NNPC) is taking steps to safeguard investments to be divested from by the International Oil Companies (IOCs).

NNPC Group Managing Director Mele Kyari, who stated this in Abuja, said the Corporation, plans to develop a comprehensive divestment policy for the IOCs operating in the country.

The move is to protect strategic national interests, it was learnt yesterday.

Already, Royal Dutch Shell said it has initiated a major divestment of its Nigerian assets, especially those in the shallow waters and onshore.

The oil giant said it has hired an international finance firm to sell its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC).

Although this move is said to be in its early stage, with consultations about the sale still ongoing, the NNPC as a partner in most of the ventures, is believed to be taking this preemptive step to safeguard its interests that are estimated to be in several billions of dollars, that if properly harnessed, have capacity to change the narrative of the nation’s net worth in the oil and gas sector.

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Kyari, who spoke at the 2021 Nigerian Society of Petroleum Engineers (SPE) Annual International Conference and Exhibition (NAICE), in Lagos, said the planned divestment policy will ensure that only investors with technical, financial and operational capabilities take possession of the IOCs assets with a view to adding value to the industry.

The NNPC boss agreed that the Corporation, though a major partner with IOCs, yet, it cannot stop them from divesting their interests because every partner or business has the right to migrate their portfolios, depending on the circumstances.

Noting that such divestment could create challenges for stakeholders like the NNPC, Kyari spoke of the need to ensure that the right and competent investors are found, that will assume the ownership of the assets and be in a position add value to the industry.

He said: “We have engaged all our partners to ensure that while they have the right of divestments, that there should be no situation where this will become a waterloo of our industry.

“Therefore, NNPC will ensure that Nigeria’s strategic national interest is safeguarded by developing a comprehensive Divestment Policy that will provide clear guidelines and criteria for the divestment of partners’ interest.

“The Corporation would make clear distinctions between Divestment of Shares and Operatorship Agreements under various Joint Operating Agreements.”

According to him, the NNPC will also leverage its rights of pre-emption as well as evaluating the operational competence and track records of new partners.

He said attention would be paid to abandonment and relinquishment costs, severance to affected members of staff as well as third party contract liabilities.

He said the divestment was being driven by global energy challenges, making the IOCs to diversify their portfolios to low-carbon investments.