The Nigerian National Petroleum Corporation (NNPC) started its week with the declaration of its readiness to introduce regulations and criteria to guide its partners about divestments in the nation’s oil and gas industry.
NNPC Group Managing Director, Malam Mele Kyari, disclosed this at the opening ceremony of the 2021 edition of the Nigeria Annual International Conference and Exhibition organised by the Society of Petroleum Engineers in Lagos.
He spoke on the theme “The Future of Energy: A Trilogy of Climate Change, Public Health & Global Oil Market,”
He affirmed that the Corporation had worked out rules to guide partners on such issues as asset abandonment; relinquishment costs; severance of operator staff; third party contract liabilities; technical, operational and financial capabilities as well as competency of the buyer and post-purchase development plan.
He said such a guideline had become necessary in order to safeguard the nation’s strategic interest in the face of the global sentiment against funding of fossil fuel projects.
Kyari noted that in subsequent deals, NNPC would introduce new rules of engagement in order to make a clear distinction between divestment of equity shares and operatorship in the various joint operating agreements in order to leverage its rights of pre-emption.
He added that there would also be clear criteria for evaluating the operational competency and track records of new partners.
He also stated that the new policy would be geared towards converting asset abandonment and relinquishment costs into opportunities to further grow the Nigerian Petroleum Development Company, which he said has become the number one upstream company in Nigeria as at today.
“Everything we are doing must be done in line with national interest. NNPC as a national oil company that represents all of us must be a global player.
“This is our ambition and we are getting there. I can tell you that within the next one or two months, we are going to publish our Audited Financial Statement for 2020. I can also confirm to you that for the first time in our history, we will declare profits,” Kyari said.
He said the Corporation would continue to play a pivotal role in the global energy transition as part of its commitment to promote low carbon investments by whetting the appetite of investors in cleaner energy sources like wind, solar, hydrogen, natural gas and bio-fuels.
“We are deepening natural gas utilization under the National Gas Expansion Programme (NGEP) to earn more carbon credit and create a net zero carbon environment in line with our drive of becoming an energy company of global excellence,” Kyari stated.
He noted that from the anticipated economic growth, rising global population and energy requirement, renewable energy sources alone would not be able to meet the energy demand by 2050, stressing that gas would still be a vital part of the global energy mix.
He said the passage of the Petroleum Industry Bill would enable the Corporation to focus more on improving oil and gas infrastructure through collaboration with major stakeholders, adding that NNPC was working with operators and service contractors to challenge cost of operations and increase profitability in the oil and gas sector.