Why IOCs Are Divesting From Nigeria — Tony Elumelu

Posted by African Examiner Featured, Latest Headlines, News Across Nigeria Sunday, August 11th, 2024

(AFRICAN EXAMINER) – Nigerian businessman, Tony Elumelu, has said oil theft largely contributed to the reasons International Oil Companies (IOCs) are divesting their interests from Nigeria to other countries.

According to him, the government and security agents in Nigeria should be able expose those responsible for stealing the country’s crude oil.

His recent outburst follows that of 2022 when he tweeted about how the country lost a huge amount of its crude oil to oil thieves.

“How can we be losing over 95 per cent of oil production to thieves? Look at the Bonny Terminal which should be receiving over 200,000 barrels of crude oil daily. Instead, it receives less than 3,000 barrels, leading the operator Shell to declare force majeure.

“It is clear that the reason Nigeria is unable to meet its OPEC production quota is not because of low investment but because of theft, pure and simple!

“Meanwhile, oil-producing countries are smiling as their foreign reserves are rising. What is Nigeria’s problem? We need to hold our leaders more accountable!” the founder of Heirs Holdings tweeted in 2022.

However, speaking with Financial Times, Elumelu said oil thieves still take away 18 per cent of crude from his field.

“42,000 barrels of crude are pumped out daily. Theft still takes away about 18 per cent of production,” he stated.

Asked who was behind the theft, he replied, “This is oil theft; we’re not talking about stealing a bottle of Coke you can put in your pocket. The government should know; they should tell us.

“Look at America — Donald Trump was shot at and quickly they knew the background of who shot him. Our security agencies should tell us who is stealing our oil. You bring vessels to our territorial waters and we don’t know?”

He recalled how the previous administration of Muhammadu Buhari, allegedly stopped him from acquiring an oilfield.

He disclosed that Heirs Holdings had been looking to purchase the oilfield since 2017, having raised $2.5 billion to purchase a different one.

But in a twist, he claimed that former President Buhari and his late Chief of Staff, Abba Kyari, blocked the deal.

In May, the Chief Executive, of Nigeria Upstream Petroleum Regulatory Commission, Gbenga Komolafe, during an industry dialogue on divestments by IOCs in Abuja, said international oil companies including Shell Petroleum Development Company, Nigeria Agip Oil Company, Mobil Producing Nigeria Unlimited, and Equinor were set to divest their investments in 26 oil blocks in Nigeria to indigenous firms.

He said, “A total of 26 blocks are proposed to be divested. These blocks have an estimated total reserve of 8.211 million barrels of oil, 2,699 million barrels of condensate, 44,110 billion cubic feet of associated gas and 46,604 billion cubic feet of non-associated gas. This is a significant contribution to the nation’s hydrocarbon resources.

“Additionally, these blocks contain P3 reserves estimated at 5,557 million barrels of oil, 1,221 million barrels of condensate, 14,296 billion cubic feet of associated gas and 13,518 billion cubic feet of non-Associated Gas.

“It is worth noting that a substantial part of the P3 reserves is located in or near producing assets. This means that a competent successor could easily mature them to 2P reserves.”

The NUPRC boss further stated that the current average production from these blocks was 346,290 barrels per day.

Providing a breakdown of this figure, Komolafe stated that the average oil production from NAOC was 28,018 bpd; MPNU, 159,378 bpd; Equinor, 36,155 bpd; and SPDC, 122,739 bpd.

“But the technical production potential is much higher – standing at 643,054 barrels (NAOC -147,481 bpd, MPNU – 244,268 bpd, Equinor – 39,203 bpd, and SPDC -212,102 bpd).

“These blocks have the potential to significantly boost our national production, which would benefit all stakeholders,” he said.