by Jov Onsat
A senior official at the Nigerian Content Development and Monitoring Board (NCDMB) is pushing for the formation of technical working groups (TWGs) composed of representatives from the hydrocarbon regulator and international companies to fast-track the approval of projects.
NCDMB executive secretary Felix Omatsola Ogbe reiterated the proposal during a meeting with senior officials from Chevron Nigeria Ltd. where the NCDMB affirmed commitment to a government-industry agreement that seeks to expedite permitting.
“The working groups could meet monthly or quarterly to evaluate the companies’ expectations from the NCDMB on their projects”, said an NCDMB news release. These regular talks intend “to resolve contentious issues, close all the gaps and come to an agreement before the official correspondences are received”, Ogbe was quoted as saying.
“That will ensure quick turn-around and approvals will be dealt with quickly and that will help to cut downtime”.
The press statement said, “Emphasizing the need for all oil and gas companies to comply with the provisions of the Nigerian Oil and Gas Industry Content Development Act, the Executive Secretary promised that the Board will accede to cogent urgent requests from companies to avoid delays that could cause costs overruns, impact negatively on oil and gas operations and the economy at large”.
Last September the NCDMB announced a deal with oil majors that aims to cut the duration of the awarding process for petroleum development projects to six months for existing production-sharing contracts (PSCs).
The pact, a memorandum of understanding that also serves as a service-level agreement (SLA), has “the goal of quickly ramping up Nigeria’s flagging crude oil production, ensuring compliance with the provisions of the Nigerian Content Act, and timely approvals of documents”, the NCDMB said in a media announcement at the time, referring to a law regulating oil and gas development projects. Besides the board, the other signatories included Nigerian Agip Oil Co. Ltd., Nigerian National Petroleum Co. Ltd. and the Nigerian subsidiaries of Chevron Corp., Shell PLC, Exxon Mobil Corp. and TotalEnergies SE. The NNPC is the concessionaire of the PSCs held by the multinationals.
“The SLA was conceptualized by the NCDMB and is intended to optimize the contracting cycle in the oil and gas industry and spur the speedy development of new oil and gas projects, contributing to increased oil production and improved national economy”, the NCDMB said at the time.
Ogbe’s predecessor, Simbi Kesiye Wabote, noted in the news release the first such SLA for the oil and gas industry in the West African country was signed May 2017 with Nigeria LNG Ltd. “[T]he industry found the outcome impressive leading to the Independent Petroleum Producers Group signing the SLA in 2018 and Oil Producers Trade Section thereafter”, Wabote said.
Recommitting to the SLA Ogbe said, “We want to create the enabling environment that will minimize conflicts with international oil companies and attract investments into the sector”.
“We want to make international oil companies comfortable and reverse the exit of foreign investors because they create jobs, and we need all hands on the deck”, Ogbe added.
Equinor ASA last year decided to exit the country, while Shell last month announced the divestment of its onshore subsidiary in Nigeria.
In November Norway’s majority-state-owned Equinor announced it was selling its stake in the Niger Delta’s Agbami oil field as it exits the country. Equinor holds a 20.21 percent stake in Agbami, which is operated by Chevron with a 67.3 percent interest. Prime 127 Nigeria Ltd. holds the remaining 12.49 percent. The world’s biggest oil discovery in 1998, Agbami holds an estimated 900 million barrels of recoverable volumes, according to information on Chevron’s website.
“This transaction realizes value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas”, Equinor said in a statement at the time.
Meanwhile Shell in a statement January 2024 said the sale of Shell Petroleum Development Company of Nigeria Ltd. “marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions”.
Nigeria has set a five-year target of over $50 billion worth of oil development projects. The projects were outlined at the Nigerian Oil and Gas Opportunity Fair in May, which saw participation from international companies including Shell, organizer the NCDMB said in a statement at the time.
To contact the author, email [email protected]