Divestments by IOCs to hit 8.8bn barrels of reserves by 2015 – DPR

The Directorate of Petroleum Resources (DPR) has estimated that divestments by the International Oil Corporations (IOCs) by end of 2015 would hit a whopping 8.8 billion barrels of crude reserves, which would amount to 25 percent of the nation’s estimated reserves of 36 billion barrels.

Also, the divestments by the Joint Venture operators in gas would be 24 trillion cubic feet (tcf) out of the 182 tcf reserves, but all of these would transfer to those known as independent operators (Indies).

These were disclosed at the 4th edition of the Abuja Petroleum Roundtable by George Osahon, director, DPR, who was represented by Sunday Babalola, who showed glee that what was lost by the IOCs was the gain of the Indies.

Other stakeholders, however, expressed concerns that the funds raised by the IOCs were heading out to other oil belts to set up new investments which came from funds mopped up from local banks to buy up the assets.

With numerous slides, Babalola said the effective acquisition of the divested oil wells and reserves was huge indication that Nigerians can achieve whatever they addressed their minds to. He said the delayed Petroleum Industry Bill (PIB), when eventually passed into law, would bring a better Nigerian National Petroleum Corporation (NNPC), create strong corporate social responsibility (CSR) with less problems with the communities, lead to aggressive oil operations, increase local capacity, and bring about benefits of increased reserves which the nation had craved for.

He, however, said government was concerned that the 40 billion reserves had not gone higher (but rather was coming down), and that there has been an inability to meet targets and deadlines. He also talked about the inability to achieve effectiveness and compete both at home and abroad.

The director said the DPR was concerned about high rate of disputes within the indigenous operators (independents as well as marginal field operators (MFOs)), saying the agency has dedicated three weeks after the APR to attend to complaints and try to resolve conflicts.

“No need to be in court all the time. Try give-and-take for peace to reign,” he counseled.

In his contribution, the executive secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa, said opportunities were huge for the local people but regretted that most elite in Nigeria did not even know what a Christmas Tree (oil rig) looked like, a sign of big disconnect between Nigerians and the oil industry.

The engineer revealed what he found abroad that only Nigerians would have to carry out further oil explorations in Nigeria, and not to expect outsiders, in the face of years of militancy and insecurity in the creeks.

He said Nigerians were now manufacturing vessels, producing drilling fluids (especially barite), and that the legacy policy has ensured that Nigerians acquired the competences to take over after every oil project.

The executive secretary revealed that of the $350 million accruing to the board so far, 70 percent has been dedicated to guaranteeing loans by indigenous operators while the rest had been dedicated to capacity building through serious trainings.