IOCs’ exit offers opportunity for increased participation of local oil firms – Oando

Oando Energy Resources, an indigenous energy company in Nigeria, has said that the ongoing divestment by International Oil Companies (IOCs) presents a significant opportunity for increased participation of local firms in the country’s oil sector.

Representatives of the indigenous energy company made this known at the recently concluded Society of Petroleum Engineers (SPE) 2024, Nigeria Annual International Conference and Exhibition (NAICE), held in Lagos.

Akinbambo Ibidapo-Obe, general manager, commercial at Oando Energy Resources, outlined the company’s strategies for capitalising on this development, stressing the need for indigenous companies to rise to the occasion.

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He described the current spate of divestments as an inevitable reality that indigenous companies have been actively preparing for.

Ibidapo-Obe said: “Where we are now is a confluence of opportunity and preparation. The government has been deliberate about ensuring the transfer of knowledge from the IOCs to the indigenous companies over the years.

“Oando, along with other indigenous companies, has also proven its technical abilities to operate and manage these assets through the marginal fields program and earlier divestments.

“It is now time for indigenous companies to step up, prove themselves on this global stage, and drive significant growth and innovation in the industry.”

For over a decade, oil majors in Nigeria have pursued divestment strategies, focusing on exiting the shallow and onshore sectors while maintaining interests in the deep and downstream waters.

In February 2022, Seplat Energy announced an agreement to acquire ExxonMobil’s entire share in its shallow water business—Mobil Producing Nigeria Unlimited (MPNU). In September 2023, Oando disclosed that it had signed a deal to acquire Eni’s subsidiary, Nigerian Agip Oil Company Limited (NAOC).

Two months later, Norwegian oil company, Equinor announced that it had sold its Nigerian entity to Chappal Energies, signalling the end of Equinor’s three-decade association with Africa’s largest oil producer, to name a few.

Ainojie’ Alex’ Irune, executive director, Oando Plc, and chief operating officer, Oando Energy Resources, represented by Babafemi Onasanya, the company’s sub-surface general manager, expressed that partnerships are not just critical, but essential to the development of the sector.

He highlighted the industry’s reliance on Joint Venture (JV) partnerships between operators and the Nigerian government, underscoring the importance of collaboration and shared goals.

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Onasanya added: “As more indigenous players take up prominent roles in the industry, they will need to secure key partnerships in critical areas for efficiency and sustainability.

“The first necessary partnership is with financial advisors/off-takers to either fund the capital-intensive nature of the business or to provide advisory to source and secure funding.

“The second is a deliberate, engaging and adaptable partnership with host communities to encourage better dialogue and impact. Lastly, we need strategic partnerships with technology partners to address different areas of specialisation.”