Divestment of oil assets not vote of no confidence in country – SPE

The Society of Petroleum Engineers (SPE) says that divestment of oil assets in the country does not have any negative implication for the nation’s oil and gas sector.
The Chairman of the group, Mr Joe Nwakwue, made this known while briefing newsmen in Abuja on Monday.
He said that the oil and gas sector in Nigeria was ripe for the growth of the secondary market through divestment of assets.
“You know that Nigeria started out oil business with the major International Oil Companies (IOCs), right from when SHELL showed up and then others.
“It means that by the 1980s all assets are held by the multinational companies; so, 50 years down the road, these assets are maturing and big companies will find it difficult to make gain on the assets as they decline.
“Naturally, they will like to sell of the assets for smaller parties to buy and that has happened in Nigeria, we have seen a lot of divestment.
“If you open the news, you will hear that SHELL or Mobil wants to sell; everybody is talking about selling one asset or the other.
“This is normal, it is nothing to worry, people tend to think that it is vote of no confidence in a country but I think it is important to understand that this is not a vote of no confidence.
“Rather, it is in the natural cause of business and there are several drivers to it,’’ he said
He said that the only challenge in the process was lack of clear rules guiding the process of divestment.
He said the SPE noted with pleasure that the secondary market was opening up and called on relevant policy makers to ensure that it had guiding rules.
“We must know clearly what the Policy, regulatory and commercial frameworks should be for this market,’’ he said.
Nwakwue said that the opening up of the secondary market through divestment of assets had propelled the choice of topic for the 2020 Oloibiri Annual lecture to be organised by the SPE.
According to him, the Lecture which will hold on March 19, has the theme “ Oil and Gas divestment of assets, the challenges, the status and ways forward”.
He said that the Niger Delta was a matured basin but Nigeria had yet to put asset to the growing market.
He said that license was last issued in the sector in 2007 adding that this had brought about scarcity of assets in the market.
“The economic impact and barrier to entry has been raised and if you are not putting up assets to the market, it will dried up,’’ he said.
He urged the policy makers to ensure adequate measures were in place to help open up the market.(NAN)