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Petroleum Minister allays fears over IOCs divestment

14 May 2014, 14:22

Abuja - The Minister of Petroleum Resources, Diezani Alison-Madueke, has described the assets divestment by International Oil Companies (IOCs) operating in Nigeria as a good omen for local investors.

Alison-Madueke said this at an investment luncheon organised by the Petroleum Technology Association of Nigeria at the recent Offshore Technology Conference in Houston, Texas.

She allayed the apprehension in some quarters that the development could create crisis in the oil and gas industry.

She noted that the trend would provide the opportunity for indigenous oil and gas companies to become active players in the upstream sub-sector of the industry.

Alison-Madueke explained that with the divestments, indigenous oil and gas companies now had the opportunity to acquire the assets being divested as springboard for the development of local capacity.

The minister stated that the divestments by the IOCs were creating opportunities for indigenous oil and gas companies to partake of the upstream sector of the industry as well as grow capacity.

"Let me allay your fears that the spate of divestments would not lead to crisis in the nation’s oil and gas industry.

She said that the divesting of IOCs would not leave the country, but only shifted their focus from onshore to the more challenging frontiers of deep offshore which currently accounted for 60 per cent of Nigeria’s production.

According to her, the indigenous Nigerian companies have been presented with the opportunity to develop local operatorship capacity as well as boost local production and consequently grow into major upstream players.

She cited the Nigerian Petroleum Development Company (NPDC), the upstream subsidiary of the NNPC, as examples of indigenous Nigerian companies that had tapped into the opportunity provided by the development.

Alison-Madueke said this had helped NPDC to transform from a small time player with a production of 60 000 barrels per day (bpd) in 2007 to a mid-size player.

She said that the NPDC was with a current production of more than 140 000 bpd through the assignment of 55 percent equity in eight divested blocks.

The minister said that NPDC had grown to become the biggest producer and supplier of gas to the domestic market through its aggressive development of the assets assigned to it from the divestment process.

She said that the Federal Government was ready to strengthen and support the company to achieve its medium term objective of growing production to 250 000 bpd.

 -  NAN

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