The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has stated that cooperation, strategic alliances, mergers, and acquisitions may give Independent Petroleum Producers Group (IPPG) flexibility to enable them to compete with multinationals in light of the growing rate of divestment by International Oil Companies (IOCs) from Nigeria.
The IPPG, an umbrella organization for indigenous Nigerian petroleum exploration and production (E&P) firms with about 25 members, regularly collaborates with government officials and other industry stakeholders to ensure the industry’s long-term goals and contribution to Nigeria’s Economic development.
The IPPG and the NUPRC asserted that the current climate is more favorable for prospects and that the nation’s oil and gas industry will operate sustainably with local participants.
While more than 23 assets have been sold off by IOCs since 2009, and more are planned, according to Gbenga Komolafe, chief executive of NUPRC, the development represents more of a chance for local businesses.
Speaking at an IPPG-sponsored event in Abuja on the eve of the Nigeria Oil and Gas (NOG) Conference and Exhibition, Komolafe claimed that indigenous companies produced around 30% of the nation’s crude oil and 20% of its gas, as well as 40% and 32% of its reserves, respectively.
He claims that seven indigenous businesses are in the top 20, with Nigeria’s largest oil reserves.
In addition, the IPPG has emerged as a significant player in the nation’s hydrocarbon resource exploration and exploitation for maximum value addition to the Nigerian economy as a result of their operational roles and business activities ie Upstream from the perspective of the Commission as the Upstream petroleum regulatory body.
He claimed that Nigeria had the highest local independent participation rate among all African nations that produce petroleum. This was due to Nigeria’s strict local content policy.
Stronger IPPG, according to Komolafe, is required through cooperation, strategic partnerships, mergers and acquisitions aimed at generating synergies, and big independents that can go up against international corporations.
Komolafe stated that although the threat that IOC divestments pose to the growth of the Nigerian hydrocarbon industry remains a serious worry, IPPG and other potential indigenous players should be encouraged by the majors’ motivation to divest.
We encourage you as indigenous players across the value chain to deploy your competency and ingenuity in promoting vibrancy and capacity utilization in the industry; he said. “It is indeed the right time to look inwards in the sector to prove the capability of the local content in value addition and optimizing the g development of the Nation’s hydrocarbon resources.
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He asserts that the IPPG is better positioned to take advantage of the tremendous potential that the IOC’s departure from the nation’s onshore and shallow water terrains presents for new operators of those assettoto to meet the rising energy demand. Toto achieve operational excellence, and he urged independent producers to take a creative and practical approach. This should include cost-efficiency improvement, carbon reduction, the creation of supportive environments with host communities, and the use of the right skills and capabilities.
Abdulrasaq Isa, the chairman of IPPG, stated that to assure the nation’s energy security, indigenous enterprises must be aware of the shifting dynamics in the oil and gas sector, particularly the energy transition and divestment by IOCs.
In addition to warning against the risks these occurrences bring to the country’s energy security, he urged the operators to see the potential in the current circumstances.
He asserts that the organization has raised the value of hydrocarbon extraction in the nation and that it will continue to promote the country’s energy security, one of the organization’s lofty objectives.
He praised President Muhammadu Buhari for his efforts to strengthen the petroleum industry through the adoption of the Petroleum Industry Act (PIA), as well as for his support of the organization, and praised the recent marginal field bid rounds for their openness.
Ambrosie Orjiako, Pioneer Chair of Seplat, Austin Avuru, of Platform Petroleum, Abdulrasaq Isa, of Waltersmith, Dr. Tunde Afolabi, of Amni International, and Layi Fatona, Pioneer Managing Director of Niger Delta E&P were among those honored.
Others included Dr. Ladi Bada, Oluseye Fadahunsi, Adebayo Ayorinde, Osariemen Owieadolor, Ignatius Ifelayo, Ebiaho Emafo, and Danjuma Saleh of Waltersmith. Charles Odita, formerly of Shell and Midwestern Oil, was another.
